The American mining company under scrutiny since declaring an interest in acquiring mining property here has announced that it has signed definitive agreements to earn a 100% interest in the mineral rights conferred under two large-scale prospecting licences in Guyana.
In a statement through the Marketwatch website, North Springs Resources Corp (NSRC) said that it has retained a well-respected Guyanese law firm to assist with the process of complying with all applicable laws and regulations in Guyana and with transfer of title at the agreed time.
The company had come under scrutiny since the Ministry of Natural Resources and the Environment said the Guyana Geology and Mines Commission (GGMC) is not aware of it doing business in Guyana with respect to mining or mineral properties.
President of NSRC, Harry Lappa subsequently wrote a letter to the Kaieteur News saying that his company had acquired the mineral rights to properties in Guyana through agreements with several private parties and not the government.
But Lappa’s credentials were questioned by several websites with the Canadian Leader-Post chronicling the recent activity of the company.
“It’s a remarkable flurry of activity for a company that, by its own admission — in an October 31, 2010 filing with the SEC — had only Cdn$16 in cash, liabilities of Cdn$108,700 and stock with a par value of one cent per share,” the Leader-Post said. Another website called Lappa a “paper millionaire.”
NSRC late Friday announced that it has signed definitive agreements to earn a 100% interest in the mineral rights conferred under two large-scale prospecting licences “in the prolific gold producing region known as the Kabouri Gold Mining Area” in Guyana.
The company said it signed two separate agreements on January 7 that will see NSRC conducting mineral exploration activities over three years on two properties held under large-scale prospecting licences. These are known as the Rio Property (12,490 acres) and the Belo Property (12,560 acres), the statement said.
Under the terms of the agreements, should a mine be developed, it is subject to a 3% Net Smelter Royalty. In consideration of the right to conduct mineral exploration, North Springs shall pay an aggregate of US$150,000 and 10,000,000 shares of restricted company common stock to the private party licence holders and shall carry out work programmes of no less than US$500,000 in the aggregate on each property, the statement said.
“Title to the Prospecting Licences shall remain in the name of the original licensees until the above expenditures have been completed and all regulatory approvals have been granted. At that time, the prospecting licences would be formally transferred to a Guyana corporation which would be wholly owned by North Springs,” the company said.
It stated that the Rio and Belo property agreements require that North Springs and the private party licence holder work together to file any and all necessary regulatory documentation and to ensure strict adherence to all applicable laws and regulations, including but not limited to those promulgated by the GGMC.
North Springs said that the Rio and Belo properties cover a combined area of over 25,000 acres of prime greenstone belt located in the Kabouri Gold Mining Area, located about 160 km south-south west of Georgetown.
It said that the area is part of a well-defined 1,000 mile long band of gold producing greenstone geology from Venezuela and French Guyana.
Although there is no documented history of gold production, the Belo and Rio properties show evidence of significant artisanal mining from alluvial, colluvial, and bedrock sources, the statement said.
“The Rio and Belo properties represent another significant opportunity to invest in a gold property with enormous upside in a well-established world-class gold mining district,” Lappa was quoted as saying. “We will work closely with the prospecting licence vendors, the GGMC, and the Ministry of Natural Resources and Energy to move forward with exploration and development at the properties as quickly as possible. We hope to one day establish ourselves as significant gold producers in the region,” he said.
The law firm retained, according to the release, specializes in corporate acquisitions, international negotiations, and mining law, among other areas.
The Guyana counsel anticipates submitting the necessary documentation to the GGMC in short order as required by law to permit North Springs to move ahead with its exploration plans, the statement said.
