Falcon Gold Corp (TSX-V:FG, OTC:FGLDF) announced that it has received final TSX Venture approval to move ahead on the option to acquire the Viernes project, 122 kilometres (km) southeast of Antofagasta City in Chile.
The company said the project presents a “tremendous opportunity to explore for potential bonanza-grade with epithermal low to intermediate sulfidation gold-silver, and porphyry copper-molybdenum mineralization in one of South America's greatest mineral endowed Paleocene-Eocene belts".
As per its memorandum of understanding (MOU) signed on October 20, 2021, Falcon Gold has agreed to make share payments over a four-year period totaling 500,000 shares and issue 500,000 share purchase warrants.
READ: Falcon Gold CEO issues letter to shareholders, says 'looking forward to a robust exploration season in 2022'
Each warrant will entitle the vendor to purchase one Falcon common share for 24 months for a purchase price set on each date of issuance at 125% of the closing with a weighted average -with a minimum $0.10 price. During the four-year option period Falcon is to make minimum expenditures on the property amounting to US$250,000.
Upon completion of share payments and expenditures, Falcon will hold an 80% interest and the vendors will retain 20%.
Then, for 30 months, Falcon will have the exclusive right to purchase the vendors’ 20% ownership in the property for a further payment of US$1.5 million, which includes a 1% Net Smelter Return (NSR) buy back with the vendors retaining a 1% NSR.
Viernes encompasses 13 claim blocks covering 3,300 hectares (ha) and is adjacent to Yamana Gold (TSX:YRI)'s El-Peñón gold and silver mine.
Falcon added that since the 1990s the area has produced 30.6 million tons of copper, which is 57 times' Canada’s annual production. It has produced 9.2 million ounces of gold, 1.5 times' Canadian production, as well as 129.3 million ounces of silver, 8.6 times' Canadian production. It has also generated multiple discoveries.
Falcon's flagship project, the Central Canada Gold Mine, is 20 kilometers southeast of Agnico Eagle's Hammond Reef Gold Deposit, which has currently estimated 3.32 million ounces of gold (123.5 million tonnes grading 0.84 g/t gold) mineral reserves, and 2.3 million ounces of measured and indicated mineral resources (133.4 million tonnes grading 0.54 g/t gold).
Contact Sean at sean@proactiveinvestors.com