VANCOUVER, Dec. 10, 2018 /CNW/ - Mirasol Resources Ltd.
(TSX-V: MRZ, OTCPK: MRZLF) (the "Company"
or "Mirasol") is pleased to report that it has entered into
a non-binding heads of agreement (the "HoA") with
Newcrest International Pty Limited, a wholly owned subsidiary of
Newcrest Mining Limited ("NCM"), for an Option to Farm-in on
the Gorbea High-Sulfidation Epithermal (HSE) gold projects (the
"Project") in Chile, and is
terminating the previously announced (news release February 26, 2018) NCM option agreement on the
Zeus Project (Figure 1).
The Gorbea HoA is subject to NCM completing its due diligence
review of the claims and the parties executing a formal option
agreement (the "Agreement") on or before January 15, 2019 or such later date as may be
agreed. The key terms of the Agreement having been settled, the
parties will execute the final Agreement once due diligence has
been completed. Mirasol has granted an exclusivity period to NCM to
complete these conditions.
The Gorbea Project comprises a package of projects totaling
26,684 ha, including the Atlas Au+Ag and the Titan Au (Cu)
projects, located in the Mio-Pliocene age mineral belt of northern
Chile. The Gorbea properties were subject to a previous joint
venture that was terminated in April
2018, after the partner had incurred exploration
expenditures in excess of US$ 8 million. The exploration
identified a significant body of HSE gold mineralization at the
Atlas project, which returned a drill intercept of 114 m grading 1.07 g/t Au, including 36 m grading 2.49 g/t Au (news release
September 11, 2017). Mirasol is
undertaking an integrated analysis of the extensive Atlas database
and will provide a technical update on the project in the near
term.
Option to Farm-in Agreement:
Under the terms of the HoA, NCM will have the right to acquire,
in multiple stages, up to 75% of the Gorbea Project by completing a
series of exploration and development milestones and making staged
option payments to Mirasol. NCM has committed to spend a
minimum of US$4 million and complete
a minimum of 3,000 m of drilling over
an initial 18-month period, subject to drill permitting timelines.
NCM has assembled a Chilean based exploration team with significant
HSE exploration experience and will operate the Gorbea exploration
program.
Stephen Nano, CEO of Mirasol,
stated that "we are pleased to again be partnering with the
Newcrest team to explore some of our prospective Mio-Pliocene belt
projects for district scale gold deposits. Newcrest has
allocated a combined US$7.3 million
in separate agreements, for the exploration of Mirasol's Gorbea and
Altazor projects over the next 12 to 18 months. We are
working with Newcrest to advance the permitting process for the
Atlas project in the Gorbea package, with the objective of drilling
during the southern hemisphere summer."
Terms:
Option phase:
- A US$100,000 cash payment upon
signing the Agreement;
- NCM has a minimum commitment to spend US$4 million and drill minimum of 3000m in the first 18-month exploration
program;
- NCM will operate the project and will receive a 5% management
fee; and
- At the end of the option phase, NCM will have the right to
exercise the farm-in phase of the Agreement.
Farm-in phase:
- Stage 1: If NCM elects to exercise the option to
farm-in, NCM will make a cash payment to Mirasol of US$500,000, and will have the right to earn 51%
of the Project over a 4.5-year period (total 6 years) by spending
an additional US$15 million (total
US$19 million), which includes a
minimum drilling commitment of 6,000
m on the Project to be completed within the first 2
years;
- Stage 2: If NCM elects to proceed to Stage 2 of the
farm-in, it will make a cash payment to Mirasol of US$650,000 and have the right to earn 65% of the
Project over an additional 1-year period (total 7 years), by
funding the delivery of a positive preliminary economic assessment,
in accordance with NI 43-101 on a resource of not less than
1,000,000 ounces of gold at a cut-off grade of 0.30 grams per tonne
(g/t);
- Stage 3: If NCM elects to proceed to Stage 3 of the
farm-in, it will have the right to earn 75% of the Project over an
additional 2-year period (total 9 years) by funding the lesser of
either: (i) additional expenditures after the completion of Stage 2
of US$100 million; or (ii) the
delivery of a positive bankable1 Feasibility Study, in
accordance with NI 43-101;
- Stage 4: After completion of Stage 3, Mirasol can elect
to: (i) contribute its proportionate share (25%) of further
development expenditures, (ii) exercise a one-time equity
conversion option to convert up to 10% of its equity into a NSR
royalty at a rate of 2.5% equity per 0.5% NSR royalty (max 2% NSR
royalty) and then contribute funding to advance the Company's
remaining project equity interest; or (iii) dilute. The rate of
dilution royalty for Mirasol (up to 2% and triggered upon dilution
of its interest to 10%) will be adjusted based on the percentage
royalty acquired as part of the equity conversion option. NCM will
hold a 0.5% NSR buyback right at fair market value exercisable on
the conversion royalty or the dilution royalty.
After NCM has met the minimum
commitment in the Option phase, NCM may terminate at any time
without liability. In the event that NCM should complete Stage 1,
but elect not to proceed to Stage 2, then NCM's 51% interest shall
be adjusted to a 49% interest. In the event that NCM completes
Stage 2, but elects not to proceed to Stage 3, then NCM's 65%
interest shall be adjusted to a 60% interest and the parties may
agree to halt further exploration or continue and contribute in
proportion to their interests or be diluted.
The HoA also contains other
customary terms including extension rights to increase the duration
of each stage 1, 2 or 3 for cash payments to Mirasol and
pre-emptive rights provisions should either party elect to sell its
interest in the Project.
Early Termination of the Zeus Agreement:
The companies have also agreed to the early termination of the
Zeus Option to Farm-in Agreement that was previously announced on
February 26, 2018. Under the terms of
the Zeus agreement, NCM had a minimum spend commitment of
US$1.5 million in the first 18-month
exploration program. The balance of the minimum commitment
expenditures for Zeus that have not yet been incurred, will be
applied towards the $4 million
initial commitment for the Gorbea Project. NCM has also agreed to a
US$200,000 early termination payment
to Mirasol. Upon termination, NCM will have no retained rights in
the Zeus project.
Mirasol wishes to thank NCM for its investment that has advanced
exploration of the Zeus project. Mirasol will report the
exploration results from last season's Zeus exploration program
shortly. Mirasol has initiated the business development process to
identify a new joint venture partner to continue exploration at the
Zeus project during the 2019 southern hemisphere summer season.
Mirasol maintains the view that Zeus is a prospective,
underexplored, Au+Ag project located in prospective geological
setting, 43km East of the Goldfields Salares Norte HSE
project2 (of 3.7 Moz
Au at 4.89 g/t Au and 49.5 Moz
Ag contained within 23.3 Mt) in the Mio-Pliocene belt of
Northern Chile.
About Newcrest Mining Limited
Newcrest is one of the world's largest gold mining companies,
operating five mines in Australia,
the Asia - Pacific and
Africa regions. Newcrest has
extensive experience developing and operating successful
underground and open pit mines in culturally and geographically
diverse environments. Newcrest seeks to identify and secure large
mineral districts, or provinces, in order to establish long term
mining operations.
About Mirasol Resources Ltd
Mirasol is a leading project generation company focused upon the
discovery, and development of economic precious metal and copper
deposits via a hybrid Joint Venture and self funded drilling
business model. Strategic Joint Ventures with major precious
metal producers have enabled Mirasol to maintain a tight share
structure while advancing its priority projects that are focused in
high-potential regions of Chile
and Argentina. Mirasol employs an integrated generative and
on-ground exploration approach, combining leading-edge technologies
and with experienced exploration geoscientists to maximize the
potential for discovery. Mirasol is in a strong financial
position and has a significant portfolio of exploration projects
located within the Tertiary Age Mineral belts of Chile and the Jurassic age Au+Ag district of
Santa Cruz Province Argentina.
Stephen Nano, President and CEO
of Mirasol, has approved the technical content of this news
release. Mr Nano is a Chartered Professional geologist and Fellow
of the Australasian Institute of Mining and Metallurgy (CP and
FAusIMM) and is a Qualified Person under NI 43 -101.
Under the terms of the pervious Gorbea Joint Venture (terminated
in April 2018), all exploration was
managed by the then joint venture partner. Pre-joint venture
exploration on the projects was managed by Stephen C. Nano, who is the Qualified Person
under NI 43-101. Exploration data generated from the previous
Gorbea Joint Venture program was reviewed and validated by Mirasol
prior to release. The technical interpretations presented here are
those of Mirasol Resources Ltd.
Mirasol applies industry standard exploration sampling
methodologies and techniques. All geochemical rock and drill
samples are collected under the supervision of the company's
geologists in accordance with industry practice. Geochemical assays
are obtained and reported under a quality assurance and quality
control (QA/QC) program. Samples are dispatched to an ISO 9001:2008
accredited laboratory in Chile for
analysis. Assay results from surface rock, channel, trench, and
drill core samples may be higher, lower or similar to results
obtained from surface samples due to surficial oxidation and
enrichment processes or due to natural geological grade variations
in the primary mineralization.
Forward Looking Statements: The information in this news release
contains forward looking statements that are subject to a number of
known and unknown risks, uncertainties and other factors that may
cause actual results to differ materially from those anticipated in
our forward looking statements. Factors that could cause such
differences include: changes in world commodity markets, equity
markets, costs and supply of materials relevant to the mining
industry, change in government and changes to regulations affecting
the mining industry. Forward-looking statements in this release
include statements regarding future exploration programs, operation
plans, geological interpretations, mineral tenure issues and
mineral recovery processes. Although we believe the expectations
reflected in our forward looking statements are reasonable, results
may vary, and we cannot guarantee future results, levels of
activity, performance or achievements. Mirasol disclaims any
obligations to update or revise any forward looking statements
whether as a result of new information, future events or otherwise,
except as may be required by applicable law.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
1
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"Bankable" is defined
as suitable to be submitted to a recognized financial institution
as a basis for lending funds for the development of a
mine
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2
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Gold Fields. (2017).
Integrated Annual Report 2017.
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SOURCE Mirasol Resources Ltd.