(OTCQB: GYST) is pleased to announce that it has entered into a Letter of Intent (LOI) to acquire an open pit hard rock gold project in Suriname. The LOI sets forth the terms upon which the Company proposes to purchase an undivided 50% interest in the Suriname project.
“We are excited about the Suriname project,” commented Paul Howarth, CEO of The Graystone Company. “This will provide the Company with a significant increase in revenue and cash flow and should help us expand in Peru as well.”
The Suriname Project
The project, referred to Suriname #1, is approximately 3 hours from closest major city. The project already has most of the equipment on site and expects to begin production in 8-12 weeks. The Company’s investment will be used to acquire excavators and pay for the mining camp. The Company expects that the project will produce 200-400 grams per day or 4,000 – 6,000 grams per month or $200,000 to $300,000 per month per Pod. The project is immediately adjacent to one of IAMGOLD’s projects in Suriname.
The Company expects to expand the operations on Suriname #1 by adding a Pod each quarter. Each Pod is expected to cost about $250,000 in equipment and is expected produce 200-400 grams per day or 4,000 – 6,000 grams per month or $200,000 to $300,000 per month. The Company’s goal is to have 4 Pods within 18 months being able to produce 16,000 – 24,000 grams per month or approximately $1,000,000 in revenue each month.
The LOI contemplates that the Company will work towards the completion of a definitive agreement (the "Purchase Agreement") in respect of the Proposed Transaction by January 15, 2013. Under the proposed terms, the Company will acquire an undivided 50% interest in the Suriname project for $100,000. The Company will receive 50% of the proceeds of the project. The funds from the gold sales are expected to be wired into an account controlled by the Company who will then make the necessary disbursements.