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Pacific Rim Mining Corp. holds a 49% interest in the Denton-Rawhide Mine located near Fallon, Nevada that is operated by 51% owner Kennecott Minerals. The Denton-Rawhide operation ceased mining in October 2002 and completed the crushing and stacking of low-grade stockpiles in May 2003. Denton-Rawhide is now in the residual leach phase of the mine's life, which is expected to continue for several years. During the residual leach phase, cash outlays for production are greatly reduced and the mine's cash flows improve substantially. Pacific Rim's share of cash flow from the Denton-Rawhide mine will be used to fund the Company's ongoing exploration efforts and corporate expenditures.
In October 2004, Pacific Rim and Kennecott Rawhide Mining Company, joint venture partners at the Denton-Rawhide residual leach gold operation near Fallon, NV ("the Rawhide Joint Venture"), signed a Property Purchase and Sale Agreement with Nevada Resource Recovery Group LLC ("NRRG") of Reno, NV in exchange for a royalty that is estimated will provide Pacific Rim with US$103.6 million in cash over the next 40+ years. The net present value of this royalty is currently estimated to be US $29 million. The executed agreement, expected to close in October 2006 subject to certain conditions, provides the Rawhide Joint Venture the right to continue to produce gold through residual leaching of the heap leach pads at Denton-Rawhide, and restart mining activities, if warranted, on land adjacent to the land conveyed to NRRG. The Rawhide Joint Venture will retain certain obligations related to mining on the property conveyed to NRRG, whilst NRRG will accept all obligations and liabilities related to the future use of the pits. For more information, read Pacific Rim's news release dated October 28, 2004.
Readers are referred to Pacific Rim's latest financial report for details of the Denton-Rawhide production profile.
Forward-Looking Statements
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