Mosquito Receives $500,000 Property Payment
Mosquito Consolidated Gold Mines Ltd. (MSQ-TSX-Venture) is pleased to report the receipt of $500,000.00 payment from International Wayside Gold Mines Ltd. (IWA-TSX-Venture).
Mosquito presently has two separate agreements with IWA. An October 1994 agreement granted IWA the right to earn a 50% interest in the Cariboo Gold Quartz claim group. In order to maintain this agreement IWA must spend $500,000 per year until a bankable feasibility study is presented. This agreement is still in effect.
In August 2003, the Mosquito entered into a second Property Option Agreement with IWA for the remaining 50% interest in the Cariboo Gold Quartz Mineral Claims and a 100% interest in the Mosquito Mine Mineral Claims (the "Property") excluding the placer mining rights. The mill, all buildings and hoist on the claims is included as part of the Property. The second option agreement provides for the following:
Wayside must make the following cash payments to the Company:
$50,000, on the signing of the agreement (paid);
$450,000 on or before September 15, 2003 (paid);
$500,000 on or before August 31, 2004; (paid)
$500,000 on or before August 31, 2005;
$500,000 on or before August 31, 2006; and,
$3,500,000 on or before December 31, 2006;
Wayside will also have the exclusive right to extract at any time prior to the exercise of the Option, a bulk sample (the "Bulk Sample") from the Properties in two stages, subject to the following terms and conditions:
The initial stage of the bulk sampling program ("Stage 1") will involve the extraction of not more than 40,000 tons of sample material or the recovery of not more that 15,000 ounces of refined gold, whichever is achieved first;
Provided that at least 15,000 ounces of contained gold in a "probable mineral reserve" (as that term is defined in National Instrument 43-101) have been added to the probable "Bonanza Ledge" mineral reserve disclosed in the Preliminary Assessment Report by David J. Pow dated April 8, 2003 (Table-11.2), Wayside will be entitled to extract the second stage ("Stage 2") of the Bulk Sample;
Stage 2 will involve the extraction of not more than 40,000 tons of sample material or the recovery of not more that 15,000 ounces of refined gold, whichever is achieved first;
After 5,000 ounces of refined gold have been recovered from the Bulk Sample, Mosquito, in addition to the Bulk Sample Royalty, will be entitled to receive $100 for each additional ounce of refined gold recovered from the Bulk Sample, and all of such payments received by Mosquito will be deducted from the cash payments.
Mosquito will be entitled to receive a royalty of 5% of "Net Smelter Returns" (NSR) derived from the Bulk Sample. On exercise of the Option, Mosquito's royalty will revert to a 3% Net Smelter Return.
In April 2004 International Wayside Gold Mines Ltd. announced that bulk sample mining at the Bonanza Ledge Zone has been completed. Approximately 10,000 tonnes from the bulk sample with an anticipated grade of 23.66 g/tonne (0.67 oz/ton) Au has been shipped to the Mount Polley Mine for processing.
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