Firm leases mining site

Shoshone Silver/Gold Mining Company executed an option to lease agreement with Black Mountain Resources Limited on July, 3, according to a company press release Monday.

The agreement gives Black Mountain Resources Ltd., an Australian company, the option to lease Shoshone’s Lakeview District Mill at the Conjuncture mine for a 15-year period. The agreement also gives BMZ the right to acquire Shoshone’s mineral claims comprising the Weber Mine Property in the Lakeview District, according to the press release.

The Lakeview Mining District is located at the southeast end of Lake Pend Oreille in Bonner County. According to the BMZ website the Lakeview Mining District has significant production and development history going back over 100 years, but very little has happened in the area since the 1970s. The producing rocks are the same group of rocks which host the major ore deposits of the Coeur d’Alene District to the east of the Conjecture mine.

According to the Conjuncture Project Update on the BMZ website Coeur d’Alene Mine Contracting LLC has been appointed as the mining contractor for the project. The project managers and principals for CDA Mine Contracting are Jeff Lambert and Steve Ivie.

Lambert and Ivie have over twenty years experience of hard rock mining with the Sunshine Mine and the Galena Mine. The website says that they will manage the development of the site works and mine development program, including the construction of the Morris Portal and driving the Morris Decline over the coming weeks and months.

Within seven days of executing the Option to Lease agreement, Shoshone will receive a nonrefundable cash payment of $500,000 from BMZ, according to the press release.

BMZ will be given the right to conduct due diligence for a period of 90 days, if they choose to execute the Option to Lease within this period it will issue a total of 5 million shares of its common stock to Shoshone, with 2.5 million of the shares issued after a one year voluntary escrow, according to the press release. Upon execution of the Option to Lease, BMZ will become the owner of the Weber Mine Property claims, according to Shoshone’s press release.

The agreement also grants BMZ a preemptive right and right of first refusal to acquire Shoshone’s interests in its mining claims located in the Lakeview Mining District and the Coeur d’Alene Mining District of Idaho, according to the press release.

The Option to Lease agreement makes BMZ will be responsible for all maintenance on and capital improvements to the mill and will be responsible for paying a net $10 per ton toll milling charge to Shoshone for each ton of ore processed, according to the press release.

For every year after the first ten years of the lease BMZ agrees to make minimum toll payments to Shoshone of $250,000 per year, and upon termination of the lease any capital improvements become property of Shoshone, according to the press release.

The agreement allows Shoshone to use the mill to process its own ore by making commercial payments to BMZ, the lease may be extended beyond its primary term for two successive 15-year periods, according to the press release.