Falcon Gold Corp (TSX-V:FG, OTC:FGLDF). said it has formed a new wholly-owned subsidiary, Latamark Resources Corp., as it evaluates a number of assets in Latin America to grow its exposure to opportunities outside of North America.
The exploration firm said it plans to spin out its Esperanza gold-silver-copper project in Argentina’s southern La Rioja province into Latamark Resources and is in the initial stages of preparing the necessary reporting requirements needed for shareholder approval.
"This is a very exciting time for Falcon as we continue to search out opportunities both domestic and now international,” Falcon Gold CEO Karim Rayani said in a statement.
“Falcon is perfectly positioned as we continue to advance our Central Canada project, the company is eagerly awaiting assays from our 2nd phase of exploration at the high-grade Spitfire Sunny Boy combined with announcements coming from our Newfoundland expansion plans. Falcon continues to add value for stakeholders - we look forward to the coming weeks," he added.
READ: Falcon Gold commences phase 2 at Spitfire-Sunny Boy project in British Columbia
The Esperanza property comprises seven mineral concessions covering an aggregate area of 11,072 hectares. High-grade gold mineralization was reportedly first discovered within the district around 1865 at the Callanas occurrences followed by limited mining conducted on gold, silver and copper zones.
Other sites of historical small-scale mining within the Esperanza property include the El Espinillo, Callanas east and west, El Abrita, Cerro Alto, Las Lajas and San Isidro gold mineralized zones.
In 2018, Falcon completed a limited sampling program at Esperanza as part of its initial due diligence. The Callanas east trenches results included a 1 metre (m) sample that returned 5,619 parts per billion (ppb) gold. A 2.5m continuous chip sample from the north end of the Callanas west exposure showed 5,905 ppb gold, 20.6 parts per million (ppm) silver and 0.29% copper.
The company said its 2018 due diligence mapping and sampling program, as reported previously, was highly successful and covered several gold-bearing zones. The geological team also mapped the trails and back roads that gave access to multiple showings and historical mine sites.
Falcon said it was able to reinstate the property option for Esperanza in a February 2021 agreement on revised terms which will result in it paying 500,000 common shares plus 500,000 warrants to the vendors and spending US$350,000 in exploration expenditures in return for an 80% interest in the project.
Upon completion of payments and expenditures, Falcon will reserve the right to purchase the vendors' 20% remaining interest for a further payment of two million Falcon shares and a one time US$1.5 million payment, which includes a 1% net smelter return (NSR) buyback, leaving the vendors with a 1% NSR.
Falcon cautioned that there are no assurances that the spinout of Esperanza will take place as it's subject to several conditions that include board approval, satisfying the TSX Venture Exchange requirements, legal and tax ramifications, determining the final details of the transaction, receipt of all regulatory approval, the availability of financing for the new subsidiary, and the overall market conditions.
Contact the author at stephen.gunnion@proactiveinvestors.com