Under the terms of the agreement, the South American copper producer can earn the stake in tenements E45/2658 and E45/2805 covering 433km2 by incurring $20m in expenditure for next five years.
Antofagasta, however, is mandated to pay first tranche of $3m within the first year of agreement execution, while remaining sum can be paid in optional tranches of $4m each for three years and final $5m in the last year of timeframe.
Further, the agreement also provides the company to earn additional 19% in the tenements by investing $15m besides solely funding the pre-feasibility study during the second earn-in phase.
The company has to incur the expenditure within four months of Encounter’s denial to fund the study.
Meanwhile, Antofagasta will also subscribe to 9,241,931 shares in Encounter for a total amount of $2m, following which former will
earn 7.5% of the issued ordinary shares in Encounter.
The initial 5,000m RC drill program has commenced and is expected to be completed within three weeks with first assay results expected in May 2013, the company added updating the operations.
