As part of the Agreement, New World can acquire up to 40% interest in the Agua Grande gold-copper project ("Agua Grande" or "the Project") located in Region IV of Chile from Sociedad Contractual Minera Agua Grande (the "Vendor").
Highlights
Inverse Polarization ("IP") and resistivity survey indicates several anomalously high zones of continuous chargeability.
3,000 metre drill program planned to commence in Q1 2014 to test IP targets and surface mineralization.
1,074 hectares including a large hydrothermal alteration zone with vein and stock-work hosted gold-copper mineralization.
Small scale open-pit and underground mining has occurred in the area with grades ranging from 2 to 5 g/t Au and from 0.6 to 3% Cu.
Excellent infrastructure including road access and proximal to grid power.
Agreement with an experienced Chilean mining and finance team.
Minimum up front cost to earn 40% in Agua Grande.
New World Resources CEO, John Lando commented, "The Company is pleased to partner with EPG Exploration Fund, an experienced mining and investment team in Chile. Agua Grande is located in a well-established mining friendly jurisdiction with drill ready IP targets in close proximity to near surface gold and copper mineralization. This transaction allows New World to benefit from EPG Exploration Fund’s experience and capital and gives us exposure to an excellent project at a low capital cost."
The Transaction
Pursuant to the Agreement, EPG Exploration Fund must invest US$1,000,000 for 60% interest in New World’s Chilean subsidiary, Minera Asturias SpA ("Asturias") and New World must invest US$115,000 upon Asturias closing an agreement to acquire up to 100% interest in the Project. Asturias will form a technical committee whereby the Company will have the right to elect one out of four members and all technical committee decisions will require a simple majority (51%).
Asturias has entered into an option agreement (the "Option Agreement") with the Vendor to acquire up to 100% interest in the Project by paying US$9,000,000 (US$150,000 paid) over 54 months. The proceeds received by Asturias will be used for payments to the Vendor, exploration programs and general working capital of Asturias. Future Vendor payments, exploration programs and general working capital of Asturias will be borne by each New World and EPG Exploration Fund on a pro rata basis. Upon Asturias earning its 100%, the Vendor will retain a 1% Net Smelter Return.
The Project
Agua Grande consists of 15 concessions covering 1,074 hectares within the Agua Grande Mining District. The Project lies 900 metres above sea level and is approximately 95 kilometres (1.5 hours) northeast of La Serena and 565 kilometres north of Santiago. The access from La Serena is via the Panamerican Highway for 80 kilometres followed by 20 kilometres of gravel road, suitable for all types of vehicles year round. Several mining roads cross the area and provide access through- out the property. Power is also available from the grid approximately 20 kilometres to the north.
An intrusive complex of granitic to granodiorite composition outcrops in the Agua Grande area. The complex has two district-scale intersecting faults running north-northwest and these are believed to be the main feeders of hydrothermal fluids to the system. A 1994 report by Grand Pacific Minerals identified hydrothermal alteration through mapping covering an area of approximately six square kilometres, including a silicified core and an argillic outer zone. Copper and gold mineralization can be found in large veins and stockworks in areas of fracturing and siliceous alteration.
Geological indicators suggest the area is underlain by a porphyry-style mineralized system. In 2011, IP and ground magnetic surveys, completed by Geoexploraciones S.A., identified large continuous zones of high chargeability.
Small scale open-pit and underground mining has occurred within the Agua Grande Mining District, including El Peralito, Venero Negro and Albrun mines which are located adjacent to the Project.
While the Company has no reason to doubt the accuracy of the historical results, the historical results have not been classified as current under National Instrument ("NI") 43-101 and require confirmation by the Company’s own exploration.
An initial 3,000 metre diamond drill program is planned to commence in Q1 2014, which has been designed based on the IP and resistivity surveys, geological mapping, and historic and recent sampling. The plan will include drill holes targeting structural higher grade zones of high chargeability which could represent disseminated porphyry mineralization. Asturias is currently reviewing drilling proposals to complete this work.
