Rio Tinto proposes acquisition of El Acay property
Aranlee Resources Ltd ARB
Shares issued 16,400,000 Oct 10 close $0.23
Tue 14 Oct 97 News Release
Mr Stephen Kay reports
Aranlee Resources has signed a letter agreement with Rio Tinto Mining and
Exploration for the company's 100% held El Acay gold-copper property
covering 48 sq km in Salta province, northwest Argentina. The property is
about 100km west of the city of Salta within a new precious metal belt
extending for over 300km from the Bolivian border in the north, along the
Chilean border, to Barrick's Diablillos gold deposit in the south. El Acay
is one of Aranlee's nine precious and base metal porphyry targets in this
region.
A strong alteration zone within intrusives and sediments, occupying an area
of about 7km x 4km, is centred on Aranlee's property and partially covers
Rio Tinto's adjacent Saladillo concession, which is also subject to the
letter agreement. Initially recognized by the Argentinean government in
1974 as a large porphyry system with rock sample values up to 1.0% copper,
40 g/t silver and 0.5% lead, the El Acay property was acquired by Aranlee
in late 1995. During 1996 and 1997 Aranlee carried out an extensive rock,
soil and stream sediment sampling program comprising over 650 surface
samples. A large area of intense alteration covering approximately 3.5km by
3km contains multiple gold and copper rock/soil geochemical anomalies with
values up to 0.5 g/t gold and 0.20% copper.
Rio Tinto can acquire 100% of Aranlee's interest in the El Acay property.
This interest is held through an agreement with Starcross Properties, a
private company, which in turn has an option to purchase agreement with the
underlying property owner at El Acay. Aranlee and Starcross have agreed to
an amendment to their agreement whereby Aranlee is deemed to have earned
its 100% interest in El Acay provided that the terms of the letter
agreement between Rio Tinto and Aranlee are fulfilled. In order to earn its
100% interest in the El Acay property, Rio Tinto must: (a) assume all
remaining option payments to the underlying property owner (totalling
US$830,000 over four years) together with a US$1.0 million cash payment due
within 180 days of completion of a bankable feasibility study; (b) spend
US$2 million in work expenditures over a five year period, including a
guaranteed US$100,000 in the first year; (c) complete a bankable
feasibility study within five years; (d) contribute to the agreement its
100% owned Saladillo concession which partially overlaps onto Aranlee's
property and (e) cease all existing litigation and agree not to pursue any
future litigation with respect to the title of Aranlee's El Acay property.
Once Rio Tinto acquires a 100% interest, Aranlee has the right to buy back
up to a 40% interest in the combined property within six months of the
completion of a bankable feasibility study by paying to Rio Tinto 1.75
times the expenditures incurred by Rio Tinto up to that date prorated for
the percentage interest sought (maximum 40%). If Aranlee elects not to
exercise its buy-back right then it will receive a 3% nsr royalty. The
letter agreement will be replaced by a formal option agreement within 90
days and remains subject to board and regulatory approvals.
The VSE has approved the issue of 100,000 common shares of the company to
Dragon Management International Services USA as a bonus for providing an
unsecured loan of US$500,000 to the company. These shares will be issued to
Dragon Capital Corp, the original source of the funding and are subject to
a one year hold period which expires on June 25 1998.
(c) Copyright 1997 Canjex Publishing Ltd. canada-stockwatch.com |
