Xiana unit acquires Santa Ines property
2018-05-30 09:50 MT - News Release
Mr. Carlos Ballon reports
XIANA ENTERS INTO A LONG TERM MINING ASSIGNMENT OF AN ADVANCED EXPLORATION PROPERY IN CASTROVIRREYNA DISTRICT, PERU
Xiana Mining Inc.'s subsidiary, Xiana Peru Mining SAC, has entered into a mining assignment agreement (Santa Ines assignment) with Compania Minera Santa Ines Y Morococha SA in respect of mining concessions, property and assets comprising the Santa Ines mine, located in the Castrovirreyna district of Peru.
Commenting on the Santa Ines assignment, Carlos Ballon, chairman and chief executive officer, said: "Santa Ines is an excellent brownfield opportunity for Xiana. The mine had been in operation for over 70 years before being recently put on care and maintenance. The property has significant exploration potential and with available infrastructure on site, this represents an ideal value creation opportunity for Xiana. Our team is excited by the prospectivity of the region and we look forward towards realization of our Chile/Peru-focused base metals growth strategy."
Overview of Santa Ines mine:
- The Santa Ines mine is a property located in the Castrovirreyna district in Huancavelica, 445 kilometres southeast of Lima.
- The property has good access through roads and highways. The Santa Ines mine has been in operation for more than 70 years, with existing plant of 2,000 tonnes per day on the site. The Santa Ines mine is currently on care and maintenance.
- The Castrovirreyna district has been the source of high-grade vein silver ore since colonial times. Over the last half century, a series of steeply dipping veins has been mined underground, and recently in response to high silver prices, in small shallow open pits, for silver-lead-zinc ore.
- The veins at Santa Ines mine are concentrated along the west-east side of a large argillized and oxidized alteration zone in sectors.
- Two types of mineralization have been encountered: (i) silver-lead-zinc vein system of intermediate-sulphidation epithermal type, and (ii) one or more porphyry copper centres are believed to be present in the district, most likely at depth.
- A total of 25 veins outcrop within the concession areas, many of which have not been drill tested.
- The exploration potential at Santa Ines mine is considered excellent. Xiana has developed a work program aimed at evaluating the existing mining developments with a view to evaluating where to direct exploration toward higher-grade zinc mineralization and evaluation of other exploration targets in the district-wide concessions.
Santa Ines assignment agreement summary:
- Pursuant to the Santa Ines assignment, Santa Ines has assigned to Xiana Peru all of its rights, titles and interests in and to the mining concession, the beneficiation concession, the property and the assets of the Santa Ines mine.
- The term of the Santa Ines assignment shall commence on May 29, 2018, and continue for a period of 20 years (subject to Xiana Peru periodically demonstrating certain minimum levels of proven mineral reserves) following the commencement date, subject to automatic renewal for one additional period of 10 years, provided that at the time of such renewal certain customary conditions have been satisfied.
- Notwithstanding the above, the first six months following May 29, 2018, shall be considered a voluntary period for Xiana Peru, during which time if Xiana Peru determines that it does not wish to continue the assignment it has the option to terminate the Santa Ines assignment.
- Xiana Peru shall make a payment to Santa Ines of $2-million (U.S.) within five days of the expiry of the voluntary period.
- As consideration for the assignment, Xiana Peru shall pay Santa Ines on a quarterly basis, a net smelter return royalty originating from the sale of mineral products from the mining concessions at 4 per cent of the net smelter returns.
- As per the terms of the Santa Ines assignment, Xiana Peru has committed to minimum expenditures in respect of the mining concessions of a total of $12.5-million (U.S.) in the four years following the last day of the voluntary period, as per the schedule presented in the associated table.
Time period Committed minimum expenditures (U.S.) By the first anniversary of the commencement date $1.5-million By the second anniversary of the commencement date $4-million By the third anniversary of the commencement date $7.5-million By the fourth anniversary of the commencement date $12.5-million
Additional items
Completion of the Santa Ines assignment is subject to satisfaction of a number of customary conditions precedent, including, without limitation, the acceptance of the TSX Venture Exchange and the satisfaction of any conditions which the TSX-V may impose.
NRG Capital Partners is acting as a financial adviser to Xiana.
McCarthy Tetrault LLP is acting as legal counsel to Xiana in relation to the Santa Ines assignment.
Qualified person
The technical information contained in this news release has been reviewed and approved by Robert Baxter (FAusIMM), a director of Xiana Mining Inc. and a qualified person as defined by National Instrument 43-101. Mr. Baxter is not independent of the company.
Stock options
The company also announces that, pursuant to its stock option plan, incentive options have been granted to directors, officers, employees and consultants of the company to purchase up to 4.6 million common shares in the capital stock of the company. The options are exercisable on or before May 30, 2023, at a price of 60 cents per share.
About Xiana Mining Inc.
Xiana Mining is a mineral exploration and development company focused on acquiring and developing mining assets in Peru and Chile.
We seek Safe Harbor.