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COMSTOCK JOINT VENTURE TO COMMENCE COMMERCIAL PRODUCTION

    VANCOUVER, Feb. 22 /CNW/ - Rea Gold Corporation and BMR Gold Corporation, jointly announced today that they have concluded negotiations of a formal Joint Venture Agreement leading to a two phase development and operation program of BMR's Comstock Gold Project near Carson City, Nevada.  Under the terms of the agreement Rea Gold will contribute up to US$2.5 million towards start up and operating costs in two phases of US$1.25 million in each.
    Rea Gold, having completed a feasibility study on Phase I of the Comstock project, has agreed to act as operator.  Work is currently underway to develop a detailed mine operating plan to bring the property into production without delay.  Current plans are forecasted to produce at the rate of 2,500 Tons per day at a head grade of 0.07 opt gold and 0.7 opt silver.  Rea Gold will earn a 50 percent undivided interest in the project by committing the first US$1.25 million contribution.  Each company will be entitled to 50 percent of operating cash flow distribution after Rea Gold recoups it's initial investment.
    A feasibility study on the second phase will be prepared by Rea and costs will be shared equally.  On completion of this study and on Rea's commitment to proceed, then Rea will contribute US$1.25 million to be applied towards installation of new leaching facilities to process ores from the North Comstock area.  Any subsequent contribution and all distribution will continue to be 50 percent for each Company subject to usual dilution provisions for either party.
    The operating plan for the Comstock Joint Venture is to produce a minimum of 40,000 ounces annually from heap-leach facilities and, if feasible, proceed to develop and process potential higher-grade underground resources.
    For further information: W. James Hogan, President and Chief Executive Officer (604) 684-7527
    (REO.)
    -0-             02/22/93


CO: REA GOLD CORPORATION ST:

-- C2656 -- X379 02/22/93
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Publication:PR Newswire
Date:Feb 22, 1993
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