Antofagasta Gold Inc. (TSX: V.AN, Stock Forum) has entered into a definitive option agreement to earn an 80% interest in the Atacama copper property in Chile.
The property, located approximately 40 kilometres north east from the city of Antofagasta, consists of approximately 293,500 hectares in Chile's Antofagasta Region II, home to some of the world's largest copper mining operations.
According to the
Antofagasta press release, Antofagasta has entered into a four year definitive option agreement to earn an 80% interest in the Atacama copper project.
“The location, size, scope and history of this exceptionally large property package make it a rare and unique opportunity, and significant event, for Antofagasta Gold and its shareholders," said William Randall, President and CEO.
The company will be able to exercise the option on a maximum of 500 square kilometers at its discretion. The company is not restricted in the selection of the area it chooses to retain, allowing it to retain the high priority targets it successfully identifies in the early stage exploration program.
The terms of the agreement consist of total obligations that are not to exceed US$6.25 million over 48 months in work commitment in addition to maximum cash payments totalling US$3.6 million. At all times during the term of the option agreement, the company has the right to relinquish any parts of the Atacama copper property back to the vendor with no further liability or payment obligations.
The vendor will retain a 3% net smelter royalty on all metallic minerals.
Antofagasta is a gold exploration company engaged in the acquisition, exploration and development of properties located in South America.
On Thursday, Antofagasta climbed 13.6% and was trading at $0.50 a share. The company had a market cap of $23.9 million, based on $47.8 million shares outstanding.