Patagonia Gold Enters Into Option Agreement with Astra Exploration Inc. for Exploration and Development of La Manchuria Property in Argentina
July 09 2024 - 7:17AM
Patagonia Gold Corp. (“Patagonia” or the “Company”) (TSX.V:PGDC) is
pleased to announce that it has entered into a binding letter
agreement dated July 8, 2024 (the “Option Agreement”) with Astra
Exploration Inc. (TSX.V:ASTR) (“Astra”, and together with the
Company, the “Parties”). The Option Agreement grants Astra an
option (the “Option”) to earn up to a 90% undivided interest in the
Company’s La Manchuria property (the “Property”) in return for
spending at least US$3.0M on the Property and making a cash payment
of US$5.0M, as described below.
The Property is the +5,600 hectare-sized, gold
and silver property owned by Patagonia Gold S.A. (“PGSA”), a
subsidiary of the Company. The Property is located within the
prospective and permissive Deseado Massif geologic region of the
Santa Cruz Province of southern Argentina. As disclosed in the
Technical Report (as defined below), the Property has a mineral
resource of 474 k (thousand) tonnes of indicated mineral resources
grading 2.59 grams per tonne (g/t) of gold and 129 g/t of silver
and a further 1.84 M (million) tonnes of inferred mineral resources
grading 1.3 g/t of gold and 40 g/t of silver.
Summary of the Terms of the Option
Agreement
- Pursuant to the
Option Agreement, Astra has an option to earn up to a 90% managing,
joint venture interest in the Property over six years (subject to
Astra’s right to extend such timeframe in accordance with the
Agreement) upon achievement of the Earn-In Obligations (as defined
below).
- A 45-day due
diligence period will commence once the Company obtains the written
approval: (i) of the Option from the holder of the existing 2.5%
Net Smelter Return (“NSR”) royalty over the Property; and (ii) from
the Santa Cruz Provincial authorities for the Company’s updated
work plan for the next five years on the Property, which has been
agreed to by the Parties.
- The Earn-In
Obligations shall vest and commence on the date (such date, the
“Election Date”) Astra delivers written notice to the Company and
PGSA confirming that it wishes to proceed with acquiring the
Option.
- Astra will incur
at least US$3.0M in staged expenditures (of which US$150,000 over
the first 12 months are non-discretionary) on and for exploration
and development of the Property by the 4th anniversary of the
Election Date, subject to Astra’s right to extend such timeframe
(the “Initial Earn-In Obligations”).
- Upon satisfying
the Initial Earn-In Obligations, Astra will have a right to
exercise the Option to earn an 80% interest in the Property.
Following such exercise, Astra and PGSA will hold 80% and 20%,
respectively, in a joint venture company holding the Property.
- Under the
Option, Astra may also acquire an additional 10% interest in the
Property by making a cash payment of US$5.0M to Patagonia (the
“Additional Earn-In Obligations” and together with the Initial
Earn-In Obligations, the “Earn-In Obligations”) within two years of
Astra having earned an 80% interest in the Property (subject to
Astra’s right to extend such timeframe).
- The Company’s
interest in the Property (i.e., its 10% or 20% interest, depending
on whether the Additional Earn-In Obligations have been satisfied)
shall be carried until publication of a technical report prepared
in accordance with National Instrument 43-101 - Standards of
Disclosure for Mineral Projects (“NI 43-101”) defining an inferred
mineral resource, an indicated mineral resource, or a combination
of inferred mineral resource and an indicated mineral resource, of
1 million ounces of gold equivalent (AuEq).
- If either
Party’s interest is diluted below 10%, such interest will be
converted to a 1% NSR royalty.
Mr. Christopher van Tienhoven, Chief
Executive Officer of Patagonia, stated: “We are pleased to
have joined with Astra for further exploration and development of
the Property, our gold and silver, exploration-stage property. This
will allow the Company’s shareholders to realize value from further
exploration and development of the Property and permit the Company
to focus on its material projects, mainly Cap Oeste and
Calcatreu.”
Qualified Person’s
Statement
Donald J. Birak, an independent consulting
geologist, Registered Member of SME, Fellow of AusIMM, and
qualified person as defined by NI 43-101, has reviewed and approved
the scientific and technical information in this news release.
Additional information about the Property and
the mineral resources referred to in this news release are
available in the technical report prepared in accordance with NI
43-101, entitled “Updated Technical Report on the Mineral Resources
of the La Manchuria Project Santa Cruz Province, Argentine” dated
effective February 28, 2019 (the “Technical Report”), which is
available under the Company’s profile on SEDAR+ at
www.sedarplus.ca.
About Patagonia Gold
Patagonia Gold Corp. is a South America focused,
publicly traded, mining company listed on the TSX Venture Exchange.
The Company seeks to grow shareholder value through exploration and
development of gold and silver projects in the Patagonia region of
Argentina. The Company is primarily focused on the Calcatreu
project in Rio Negro and the development of the Cap-Oeste
underground project. Patagonia, indirectly through its subsidiaries
or under option agreements, has mineral rights to over 430
properties in several provinces of Argentina and is one of the
largest landholders in the province of Santa Cruz, Argentina.
For more information, please
contact:
Christopher van Tienhoven, Chief Executive
OfficerPatagonia Gold Corp.T: +54 11 5278 6950E:
cvantienhoven@patagoniagold.com
FORWARD-LOOKING STATEMENTS
This news release contains certain
forward-looking statements, including, but not limited to,
statements with respect to, among other things, the Option
Agreement and Astra’s interest in the Property, the advancement and
development of gold and silver projects in the Patagonia region of
Argentina, including the Calcatreu property, and the anticipated
growth in shareholder value. Wherever possible, words such as
“may”, “will”, “should”, “could”, “expect”, “plan”, “intend”,
“anticipate”, “believe”, “estimate”, “predict” or “potential” or
the negative or other variations of these words, or similar words
or phrases, have been used to identify these forward-looking
statements. These statements reflect management’s current beliefs
and are based on information currently available to management as
at the date hereof.
Forward-looking statements involve significant
risk, uncertainties and assumptions. Many factors could cause
actual results, performance or achievements to differ materially
from the results discussed or implied in the forward-looking
statements. Factors that could cause future results to differ
materially from those anticipated in forward-looking statements in
this news release include, among other things, (i) the risk that
the Company may not be able to secure the requisite approvals for
the Option Agreement, (ii) changes in law, (iii) unforeseen
circumstances and events affecting the Company’s ability to
implement its business strategies and pursue business
opportunities, (iv) the state of the capital markets, (v) the
availability of funds and resources to pursue the Company’s
proposed plans, and (vi) general economic, market and business
conditions. For a more detailed discussion of additional risks and
other factors that could cause actual results to differ materially
from those expressed or implied by forward-looking statements in
this news release, please refer to the Company's filings with
Canadian securities regulators available on SEDAR+ at
www.sedarplus.ca. All such risk factors should be considered
carefully, and readers should not place undue reliance on the
forward-looking statements in this news release. Although the
forward-looking statements contained in this news release are based
upon what management believes to be reasonable assumptions, the
Company cannot assure readers that actual results will be
consistent with these forward-looking statements. These
forward-looking statements are made as of the date of this news
release, and the Company assumes no obligation to update or revise
them to reflect new events or circumstances, except as required by
law.
Neither the TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this news release.
Astra Exploration (TSXV:ASTR)
Historical Stock Chart
From Aug 2024 to Sep 2024
Astra Exploration (TSXV:ASTR)
Historical Stock Chart
From Sep 2023 to Sep 2024