Linear Gold Maintains a 100% Interest in the Ixhuatan Project, Mexico
Tuesday December 29, 2009
HALIFAX, NOVA SCOTIA, December 29, 2009: Linear Gold Corp. (TSX: LRR) (“Linear”) announces that it has received notice from Kinross Gold Corporation that they will not exercise their option to acquire an initial 60% interest in the Ixhuatan Project, thereby allowing Linear to maintain its 100% interest in the project.
The Ixhuatan Project covers an area of over 98,000 hectares, in Chiapas, Mexico, including the Campamento Gold Deposit. The Campamento Gold Deposit is a high-grade, gold-silver deposit situated at or near surface. In June 2006, Linear announced the results of a National Instrument 43-101 compliant gold and silver resource on the Campamento Deposit that included 1,041,000 ounces of gold in the measured and indicated categories with an additional 703,000 ounces in the inferred category (at a 0.50 gram per tonne cut-off). The total silver content in the deposit was calculated at 4,400,000 ounces in the measured and indicated categories with an additional 2,260,000 in the inferred category.
Pursuant to the October 2007 option agreement between Linear and Kinross, Kinross made an initial payment to Linear of US$1.0 million and was required to incur a minimum of US$15 million of expenditures on the Ixhuatan Project within a 24-month period, following which they had a 90 day period to exercise their option to acquire an initial 60% interest in the Project for US$45 million. Kinross would have then had a further option to increase its interest in the Project to 70% by making an additional payment of US$55 million and would have been required to make a payment of up to US$15 million based on the size of the proven and probable gold equivalent reserve.
Pursuant to the terms of the agreement, Kinross will pay Linear US$3,387,390, representing the difference between the minimum US$15 million expenditure and the actual work costs incurred by Kinross during the option period.
Wade Dawe, President and Chief Executive Officer of Linear, stated “Kinross has been an excellent partner to lead and fund the exploration program on the Ixhuatan Project over the past two years. Maintaining a 100% interest in the Ixhuatan Project provides Linear with a strategic pipeline of projects to compliment the development of our Goldfields Project in northern Saskatchewan.”
Giving effect to this development, Linear is debt-free and well positioned for advancing development of the Goldfields Project with $45 million in cash and 44.2 million shares outstanding. In addition, Linear holds a 100% interest in the Goldfields Project, in Northern Saskatchewan, and the Ixhuatan Project, Mexico, together hosting gold resources of over 2 million ounces (National Instrument 43-101 compliant), as well as carried interests in three Dominican Republic Properties subject to earn-in agreements that provide for the completion of feasibility studies at no expense to Linear
For further information, please contact:
LINEAR GOLD CORP.
Wade K. Dawe
President and Chief Executive Officer
(902) 422-1421
Website: www.lineargoldcorp.com
Mr. Mike Sylvestre, P.Eng., a qualified person under National Instrument 43-101, has reviewed and approved the scientific and technical information in this press release.
