Falcon Gold Corp (TSX-V:FG, OTC:FGLDF) reported it had now inked the definitive option to buy the Viernes project, which lies 122 kilometres (km) southeast of Antofagasta City in northern Chile.
"We are entirely pleased to have acquired such a prominent land position in one of the richest copper-producing hubs in the world," said Karim Rayani, Falcon's CEO.
"We are directly adjacent to Yamana's El-Penon Gold-Silver mine, which produces 160,000 ounces of gold per year and 5,000,000 million ounces of silver.
"It's also just 30kms from the Escondida porphyry Copper-Gold-Moly cluster, operated by BHP and Rio Tinto, Barrick - Antofagasta's Zaldívar copper mine is 35 NE of our project and is expected to produce shortly. It's a very competitive area and near impossible to get in this camp."
The claims encompass 13 blocks covering 3,300 hectares (Ha) and the western portion of the project offers prospectivity for epithermal gold veins evidenced by outcrops of the Chile-Alemania Paleocene volcano-stratigraphic sequence - the same host rock at the El-Peñón gold deposit owned by Yamana Gold (TSX:YRI).
READ: Falcon Gold signs MOU to acquire Viernes project adjacent to Yamana’s El-Peñon gold-silver deposit in Chile
Falcon will make share payments over four years totalling 500,000 shares and issue 500,000 share purchase warrants.
Each warrant will entitle the vendor to purchase one Falcon share for 24 months for a purchase price set on each date of issuance at 125% of the closing price of Falcon shares traded on the TSX Venture Exchange.
During the four year option period, Falcon is to make minimum expenditures on the property of US$250,000.
Upon completion of the share payments and expenditures, Falcon will hold an 80% interest and the vendors will retain 20%.
After that, for 30 months, Falcon will have the exclusive right to purchase that 20% for a further payment of US1.5 million which includes a 1% NSR buyback, with the Vendors retaining 1%.
Americas-focused explorer Falcon says its flagship project is the Central Canada gold mine, which lies 20 kilometres (km) southeast of Agnico Eagle's Hammond Reef gold deposit. The firm also holds eight additional projects.
Contact the author at giles@proactiveinvestors.com