Mirasol Resources Ltd. reported that the Company and one of its 100% owned Argentine subsidiaries, signed a definitive exploration and option agreement (the “Claudia-OGC JV”) with OceanaGold Corporation to explore the Company’s 100% owned, Claudia gold-silver project, located in Santa Cruz Province.
Oceana Gold Corporation (OGC) is a multi-national, high margin gold producer with an expanding precious metal production profile from its operations in the United States, New Zealand and the Philippines. Mirasol and OGC are already partnered in an existing option agreement (JV) signed on May 18, 2017 for the La Curva project which is also located in Santa Cruz Province,– the La Curva JV has a first year spend commitment of US$1.25 million.
Claudia is a 100% Mirasol owned project, which hosts five exploration stage, low-sulfidation epithermal gold-silver prospects each of which have multiple drill-ready targets. Claudia adjoins the world class Cerro Vanguardia gold-silver mining district, operated by Cerro Vanguardia S.A. (“CVSA”, majority owned by AngloGold Ashanti), with current resources and historic production in excess of 8.6 Moz gold and 135 Moz silver.
The Claudia-OGC JV, grants OGC the option to acquire in stages, up to a 75% interest in the Project and requires OGC to make a first year commitment of US$1.75 million in exploration expenditure, complete 3,000 m of drilling and make a US$100,000 payment to Mirasol on signing the Agreement.
Mirasol’s CEO Stephen Nano stated that “we look forward to updating shareholders with results from the Claudia and La Curva JV programs, that will see a combined exploration spend of US$ 3.0 million and approximately 6,000 m of drilling during the first year of the JV’s.” OGC and Mirasol are currently finalizing the Claudia and La Curva exploration programs that will be initiated in the fourth quarter of 2017. Mirasol will concurrently operate both JV exploration programs for the first 12 months.
The terms of Claudia-OGC JV provide for five sequential earn-in stages, including the First Year Commitment, as follows:
- Initial Earn-in: Grants OGC the option to earn-in to 51% of the project over a four-year period including completion of the First Year Commitment by:
- funding cumulative exploration expenditure totaling US$10.5 million (inclusive of the First Year Commitment); and
- making staged cash payments to Mirasol totaling US$1 million (inclusive of the payment on signing).
Mirasol will serve as operator for exploration for the first year in return for a 5% management fee. OGC may elect to serve as operator thereafter or request that Mirasol continue as operator.
- PEA Milestone: Following completion of the Initial Earn-in, OGC may elect to increase its interest to 60% of the Project, within two years of the Initial Earn-In date, by funding and delivering a preliminary economic assessment, in accordance with NI 43-101, that outlines an inferred resource of not less than: (a) 500,000 ounces of gold equivalent at a cut-off grade of 0.25 g/t gold equivalent for an open pit resource; or (b) 500,000 ounces of gold equivalent at a cut-off grade of 1.5 g/t gold equivalent for an underground resource.
- Feasibility Milestone: Following completion of the PEA Milestone, OGC may elect to increase its interest to 65% of the Project by funding and delivering, within two years of the PEA Milestone, a feasibility study on the Project in accordance with NI 43-101.
- Block Model Payment: Mirasol’s previous JV partner for the Claudia Project, CVSA prepared a preliminary block model that outlined a non-NI 43-101 compliant mineral inventory from their drilling at the Io Vein, Curahue prospect. In the event that ounces of gold-silver outlined within this block model are included in the resource inventory for either the PEA or Feasibility Milestone earn-in stages of the Claudia Agreement, then Mirasol will receive a US$250,000 Block Model Payment from OGC.
- Decision to Mine: Concurrently with the time period to complete the Feasibility Milestone, OGC may elect to increase its interest to 70% of the Project by funding and delivering the following:
- a feasibility study suitable to be submitted to a recognized financial institution as a basis for lending funds for the development of a mine; and
- approval of a decision to mine by the OGC board.
- Production Financing: At the Decision to Mine stage, Mirasol can elect to either:
- retain 30% of the Project by funding its proportionate share of further development costs; or
- exercise its right to require that OGC fund its proportionate share of the development costs (to be repaid from 50% of Mirasol’s net cash flow from the Project) in exchange for Mirasol reducing its interest in the Project to 25%, and thereby increasing OGC’s interest to 75%.
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