The Red Canyon property is now under lease by Montezuma Mines, Inc. The project management agreement signed with Miranda Gold allowed for the formation and organization of a limited liability company in regards to the lease and rights of the Red Canyon property and how operations will be conducted.
Montezuma owns 60 percent of the limited liability corporation and Miranda holds the remainder. Having met the expenditure requirements of $4 million under a now superseded exploration agreement, Montezuma has paid Miranda $360,000 for an option of a buy-out on the 40 percent owned by Miranda in the limited liability corporation. Miranda will retain a 0.5 percent net smelter return royalty, upon meeting the purchase conditions during the term of the lease.
Miranda will 100 percent fund the costs of the corporation to maintain and advance the exploration of the Red Canyon property. If Montezuma fails to fund or meet obligations, it forfeits its interest back to Miranda.
Miranda entered into the 20-year mining lease, with option to purchase the property in November of 2003 from Red Canyon Corporation. The lease could be extended for three years providing conditions are met.
The Red Canyon project consists of 254 unpatented lode mining claims covering approximately 5,248 acres along the Battle Mountain-Eureka Gold trend in Eureka County.