The Letter of Intent provides that Midlands may spend $4.5 million in exploration over four years to earn an initial 51% interest in the project, of which the first year expenditure of $500,000 is a firm commitment.
Thereafter, Midlands can earn an additional 14% interest over two years by obtaining a Mining Exploitation Permit from the Serbian Government and a further 10% (for a total of 75%) by completing a Bankable Feasibility Study within two years of obtaining the Mining Exploitation Permit. Reservoir will be the project operator until Midlands has earned the initial 51% interest.
The grant of the option is subject to completion by Midlands of legal and financial due diligence and the execution of a definitive agreement.
The Parlozi project is a 91 square kilometre exploration permit covering occurrences of historical lead-zinc-silver mining in the Kosmaj-Babe area of the Sumadija mining district in central Serbia.
The mineralization in the permit comprises silver-bearing vein and replacement-type lead-zinc sulphides hosted by carbonate sedimentary rocks associated with intrusive Neogene quartz latite dykes and volcanic breccias.
This type of mineralization has long supported lead-zinc-silver mining operations in the Trepca district and other mines in the region.
Mineral exploration in the permit area during the 1970s and 1980s by state-controlled companies of the former Yugoslavia included 36 drill holes totalling 15,105 metres, exploration adits, airborne and ground geophysical surveys, and detailed geological and mineralogical studies.
