Solaris Copper’s Minera Ricardo Resources (MRRI) has signed an earn-in option agreement with Minera Freeport-McMoRan South America (Freeport) with respect to its Ricardo property (Ricardo) in Chile.
Image: A native copper. Photo: courtesy of Native_Copper_Macro_Digon3.jpg: “Jonathan Zander (Digon3)"/ derivative work: Materialscientist (talk)/Wikipedia.
Solaris CEO Greg Smith said: “Exploration at the prospective Ricardo property will be significantly enhanced by the technical and financial capacity of Freeport. We are very pleased to partner with Freeport in advancing the Ricardo property as we focus on our flagship Warintza project in Ecuador.”
Option Agreement Overview
The Option Agreement provides for a three-staged process by which Freeport can earn up to an 80% interest in the Ricardo property for gross expenditures of $130 million or $30 million plus the delivery of a feasibility study for a mine at Ricardo.
A summary of the key terms is as follows:
To earn an initial 60% interest in the Ricardo property, Freeport must complete both Stage 1 and Stage 2:Stage 1: Upon receipt of the relevant exploration permits (the “Effective Date”), Freeport will spend $4.2 million in exploration expenditures over the two years following the Effective Date.
Stage 2: Upon completion of Stage 1, Freeport can elect to spend $4.8 million in the third year following the Effective Date, $8.0 million in the fourth year following the Effective Date and $13.0 million in the fifth year following the Effective Date.
Upon completion of both Stage 1 and Stage 2, Freeport can elect to complete Stage 3 to earn an additional 20% interest in the Ricardo property whereby Freeport will complete the first of (i) sole funding a feasibility study for a mine at Ricardo and (ii) spending an additional $100 million in exploration expenditures.
Should Stage 3 not be completed within ten years, Freeport can maintain the option by paying to MRRI $1 million annually until Stage 3 is complete.
About the Ricardo Property
The Ricardo property consists of approximately 14,000 hectares strategically located along the West Fissure fault in Chile approximately 25 kilometres south of CODELCO’s Chuquicamata Mine, one of the largest copper mines in the world.
The West Fissure is highly prospective and hosts numerous other large porphyry copper deposits.
Source: Company Press Release