Kenorland Minerals Ltd (TSX-V:KLD) said it has signed an earn-in agreement with Antofagasta Minerals SA on the Tanacross copper-gold project located in eastern Alaska in the US.
The agreement grants Antofagasta an option to acquire a 70% interest in the project by spending US$30 million on exploration over eight years and delivering a NI 43-101 compliant preliminary economic assessment report.
The Tanacross project covers 45,000 hectares of Alaska state-owned land, approximately 70 kilometres northeast of Tok, along the Alaska Highway. The project hosts a cluster of late Cretaceous porphyry copper occurrences including East Taurus, West Taurus, and Bluff.
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Zach Flood, CEO of Vancouver-based Kenorland, said the company is excited to be working with Antofagasta on the Tanacross project.
“The property, which covers numerous mineralized systems and target areas, warrants significant exploration to unlock the discovery potential that we believe exists. We look forward to getting back on the ground as soon as possible to begin work which will lead towards drill-target definition," Flood said in a statement.
Under the terms of the agreement, Antofagasta can earn a 70% interest in Tanacross by making cash payments in an aggregate amount of US$1 million plus a success payment of US$4 million upon exercise of the option and spending US$30 million on exploration over eight years, with a firm commitment to spend US$1 million in year one, and delivering the report.
During the option period, Antofagasta will fund all exploration and Kenorland will be the initial operator.
Once Antofagasta has earned its 70% interest, Kenorland and Antofagasta will form a 30:70 joint venture. If either party's interest in the joint venture falls below 10%, that party's interest will be converted to a 2% NSR, one quarter of which can be purchased by the other party for US$2 million.
The Tanacross project’s age of mineralization is similar to the giant Casino porphyry copper system, which is located 140 kilometres to the south-east in Yukon, as well as the Tetlin gold skarn system, located 70 kilometres to the south-west of the Tanacross project.
The project has seen a total of 17,076 metres (m) of drilling in over 67 drill holes, since the initial discovery of East Taurus in 1971 by Duval Corporation.
Multiple drill campaigns have been carried out by nine different companies including the most recent drill program in 2019 when the property was held under option to Freeport McMoRan. The best historical results from the project include drilling at East Taurus, where one drill hole intersected 232.56m at 0.31 % copper, 0.25 grams per ton (g/t) gold, and 0.036% molybdenum.
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