Pegasus Gold Inc. Monday announced an agreement to purchase up to 60 percent of a Panama mining property for $14 million in cash and exploration expenditures.
The Capira Dorada concession, owned by a private company with the same name, covers about 38 square miles eight miles southwest of Panama City.
As part of its initial investment, Spokane-based Pegasus will spend $2.1 million. Of that, $1 million will be used to complete a review of known mineralization, and to start mapping and exploration drilling.
The full 60 percent interest would be granted over six years after payment of $8 million to the owner of Capira Dorada, half of that after the start of mine construction, and $6 million on a feasibility study and project financing.
If a mine is built, Pegasus would receive 90 percent of the cash flow until its investment is repaid.
President Werner Hennecker said Pegasus is aggressively exploring the site, which shows extensive outcrops of gold mineralization.
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