Pegasus Restructures Goldbelt Agreement

Spokane-based Pegasus Gold Friday restructured its agreement with Goldbelt Resources Ltd. to streamline the operation of the Kazgold project in Kazakhstan.

The new agreement creates a 50/50 joint venture between the two companies to develop the mine site at Leninogorsk in the Republic of Kazakhstan.

The new partnership ends the previous agreement between Pegasus and Goldbelt. It eliminates a convertible loan agreement and the plan to offer Goldbelt stock shares to Pegasus.

Slated to start up in spring 1997, The Kazgold project will process up to 7 million tons of mine tailings a year to produce up to 150,000 ounces of gold. Pegasus will manage the project for the joint venture and the two companies will participate equally in the project.

Goldbelt returns the $3 million loaned from Pegasus under the old agreement, and in turn, Pegasus agrees to re-lend $1.5 million.

Both companies lauded the Kazakhstan government’s support for the project, including a recently signed decree allowing the companies the right to sell and export the gold from Kazgold.