Golden Mile Resources (ASX:G88) has signed a deal with Outcrop Silver & Gold Corporation (TSX-V:OCG) to acquire the Pearl Copper Project in Arizona, US.
Located in the San Manuel mining district, 40km northeast of Tucson, the Pearl Project is owned by Zaya Resources, a subsidiary of Outcrop US, which is in turn a subsidiary of Outcrop Silver & Gold.
Under the binding term sheet, Golden Mile will pay $100,000 to Outcrop and issue a 1% net smelter return (NSR) royalty on the production of copper, gold, and other metals.
From there, both companies will enter into a definitive agreement and establish a joint venture.
Golden Mile may then earn a 51% stake in the Pearl Project by spending $2 million within three years, and a further 34% by spending $10 million over the following five years.
Golden Mile has also agreed to pay Outcrop $2 million should a JORC-compliant resource reach 750,000 tonnes of copper at a minimum grade of 0.3%.
If either party fails to meet its obligations under the joint venture and as a result is diluted below 10%, their interest in the joint venture will revert to an additional 1% NSR royalty.
Subject to Golden Mile spending a minimum of $250,000 on the claims, the company may withdraw from the joint venture at any time following the settlement date.
Managing Director Damon Dormer says a unique set of circumstances has provided the company with an opportunity to enter the Laramide Porphyry Belt.
“The presence of two historical underground mines within the Pearl Project, no modern exploration, numerous copper workings, significant rock chip values, and a location within a world-class copper province containing many significant deposits and mines,” he says.
“This demonstrates the exciting exploration potential of this project for Golden Mile and we aim to hit the ground running upon execution of the definitive agreements.”
Golden Mile now plans to complete its due diligence, including a site visit, and develop initial exploration programs at the Pearl Project.
Write to Aaliyah Rogan at Mining.com.au
Images: Golden Mile Resources
