Taken out of the news release
2009-01-28 12:52 ET - News Release
On Aug. 21, 2008, Shoreham and Rexma Participacions, an alluvial mine operator based out of Leon, France, signed a definitive agreement entitled "project operating plans and principles -- Marudi Mountain alluvial mining agreement." This original agreement envisaged commencing sustained production at a rate of 500 cubic metres per day commencing July 1, 2009, with an ultimate target rate of 2,000 cubic metres per day. Since that time, Rexma has undertaken field investigations to firm up mining, resource and processing parameters, and has signed a revised agreement with Shoreham whereby Rexma has committed to providing Shoreham with a definitive mining plan by March 31, 2009, and to be in production by Nov. 1, 2009, at a minimum sustained production rate of 125,000 cubic metres per year and increasing its plant capacity to 200,000 cubic metres per year by Oct. 1, 2010, and further increasing operations to at least 300,000 cubic meters per year prior to Oct. 1, 2011.
Rexma will be responsible for all of its costs, will be required to pay Shoreham an agreed-upon monthly sum for Shoreham's Guyanese overhead, office and support costs, pay all royalties to the Guyanese government and underlying royalty holders, and will pay a gross production royalty of 10 per cent to Romanex 100 per cent of which moneys Shoreham has the right to use to support its own exploration on the Marudi property. In addition, all expenditures incurred by Rexma qualify as earn-in expenditure by Shoreham to acquire 75 per cent of Romanex. Pursuant to notice provision, Rexma's operations must be relocated from areas which Shoreham needs to undertake its own exploration and mining activities. Initial operations will be integrated as a prestripping component of Shoreham's development program for the property. The benefits to Shoreham include improvements to access and infrastructure, expansion of facilities, accelerated development of saprolite and bedrock targets, acceleration of property interest vesting through qualified expenditures, generation of cash flow to finance Shoreham's own exploration and development programs, and reduced overheads through cost sharing.
