At the San Vicente property, production continued under the 50,000 tonne agreement with EMUSA
, a Bolivian mining company acting as operator.
At today's share price and issued capital, EMUSA
would receive approximately 10 percent of Orvana's shares outstanding.
At the time of this MD&A the Company was in negotiations with both EMUSA and COMIBOL regarding the further development of the San Vicente mine.
In 2004, Bolivian mining company EMUSA earned a 50% interest in the San Vicente project and conducted small-scale mining which contributed 313,029 ounces of silver to Pan American's production, paid as a royalty.
John Carlesso, Apogee's President and CEO commented, "This agreement with EMUSA will enable Apogee to continue exploration of the Buena Vista vein system to the southeast in what appears to be the continuation of a very interesting zone of mineralization.
To earn a 75% interest in the project, Apogee will: (i) issue 100,000 shares to EMUSA on execution of the definitive agreement, (ii) spend US$250,000 on exploration within two years, with a minimum of US$100,000 in the first 12 months, (iii) issue 100,000 shares and pay US$50,000 on or before the 12 month anniversary of the agreement, and (iv) issue 300,000 shares and pay US$100,000 on or before the 24 month anniversary of the agreement.
However due to the protracted negotiations with Comibol, the Bolivian state owned mining company and EMUSA, a Bolivian mining company, Pan American only recommenced processing ore on a toll basis at a nearby facility in mid-October, producing only 81,000 ounces at San Vicente and making it impossible for the Company to meet its production target in 2005.
Pan American has been developing the San Vicente mine in Bolivia under agreements with Comibol and EMUSA since December 2001.
During the third quarter of 2005, the Company concluded negotiations with EMUSA
, a Bolivian mining company and a third-party concentrates trader with respect to the ownership of PAS Bolivia.
In addition, the Company extended a production agreement with the Bolivian mining company, EMUSA
that has the right to earn a 49 per cent interest in the project by financing the next $2.
Limited scale mining operations of 200 tonnes per day continued at the San Vicente project, under the operatorship of EMUSA
, a Bolivian mining company that is extracting ore from the mine under a lease agreement with Pan American.
In light of the successful operation to date that has been possible using EMUSA
's nearby milling facility, Pan American is discussing with EMUSA
other options that would increase silver production from San Vicente to the benefit of both companies and the Bolivian state mining company COMIBOL.