Canadian gold mining company Reunion Gold Corporation has announced an agreement to undertake exploration and acquire a 100 percent interest over a 96,500-hectare project located on the Lely Mountain and adjacent land in Eastern Suriname.

The project encompasses a greenstone belt with similar geology to that hosting the Gross Rosebel gold deposit and other substantial gold deposits in Venezuela, Guyana and French Guiana.

Grasshopper Aluminum Company, a Surinamese state-owned mining company, has agreed to transfer rights of exploration as soon as an amount of US$5 million has been spent in exploration on the Lely project. Under the agreement, the minimum exploration expenditures are US$8 million over a five-year period including US$500,000 the first year.

Grassalco will retain a Net Smelter Return Royalty varying between 3 percent and 5 percent depending on the price of gold. This royalty includes the royalty payable to the government of Suriname under the mining laws of Suriname.

After completion of a feasibility study and environmental impact study, Grassalco will have a 90-day option to acquire a 20 percent interest in the project at the then market price.

The Lely project is located within the greenstone belt of Eastern Suriname, approximately 112 miles south-southeast of the capital Paramaribo.

Very little, if any, systematic modern gold exploration has been carried out in this area of Suriname notwithstanding the favourable geological setting, the over one hundred year history of artisanal gold mining and the current intensive artisanal gold mining in the northern part of the Lely Project.

Reunion is already well established in Suriname as a result of its ongoing exploration at its Antino project with an established geological and field support personnel, the necessary field equipment, plus a dedicated assay laboratory and logistics facility in Paramaribo.

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