Eurasian Minerals (EMX-V) May 15, '14 has signed an exploration and option to purchase agreement, through its wholly owned subsidiary, Bronco Creek Exploration, for the Lomitas Negras porphyry copper project with Kennecott Exploration Co., part of the Rio Tinto group. The project is approximately 50 kilometers northeast of Tucson, Arizona within the prolific Laramide-age porphyry copper belt of the southwestern United States. Please see www.eurasianminerals.com for more information.
Commercial Terms Overview. Pursuant to the Agreement, Kennecott can earn a 100% interest in the project by completing US$4,500,000 in exploration expenditures and paying escalating option payments totaling US$900,000 within five years after the date of the Agreement, after which EMX will retain a 2% NSR royalty.
In addition, Kennecott will make yearly advanced minimum royalty ("AMR") payments and other payments based upon project milestones as outlined below:
-- Annual AMR payments starting at US$125,000 and commencing upon exercise of the option. -- Milestone payments consisting of: -- US$500,000 upon completion of an Order of Magnitude Study or Preliminary Economic Assessment; -- US$1,000,000 upon completion of a Prefeasibility Study; and -- US$2,500,000 upon completion of a Feasibility Study. The Feasibility Study payment will be credited against future royalty payments.
Property Overview. The Lomitas Negras project is located approximately five kilometers southeast of the town of San Manuel, and contains isolated altered outcrops that occur in a broad area of post-mineral cover rocks. The project area is ringed by Laramide-age intrusive rocks and porphyry copper/skarn deposits that include BHP-Billiton's San Manuel-Kalamazoo deposits (approx. 16 kilometer north), Redhawk's Copper Creek deposit (approx. 20 kilometers northeast), and Oracle Mining Corp.'s Oracle Ridge deposit (approx. 10 kilometers southwest). Outcrops on the property exhibit alteration and anomalous base metal mineralization that characteristically occurs on the margins of porphyry copper systems. EMX's recognition of the importance of the altered outcrops, combined with a new interpretation of the extensional structural setting of the area, led to the identification of concealed porphyry copper-molybdenum targets beneath post-mineralization pediment cover.
EMX acquired the property and completed geologic mapping, outcrop geochemical sampling, a soil gas hydrocarbon survey, and a property-wide ZTEM/magnetic geophysical survey, all funded by a previous partner. Three target areas with coincident geologic, geophysical, and geochemical anomalies were identified from this work, and 32 sites were permitted for drill testing. In 2013, EMX completed a three hole, pre-collar reverse circulation drilling program over two of the target areas in preparation for a follow-up diamond drilling program. Two of these pre-collar holes encountered altered porphyry and host rock fragments within the deepest pediment horizon that suggest a nearby, concealed porphyry source.
EMX and Kennecott are designing a work program to follow up on EMX's previous exploration results and targets. EMX will be the operator through the initial program.
Mr. Dean D. Turner, CPG, a Qualified Person as defined by National Instrument 43-101 and consultant to the Company, has reviewed, verified and approved disclosure of the technical information contained in this news release. |
