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Exploradora Property Summary
The Exploradora property covers more than 5,000 hectares and is located immediately south of Codelco's Exploradora porphyry copper-gold project, along the prospective Domeyko Cordillera of northern Chile, and is prospective for epithermal gold and silver mineralization of low sulphidation vein-type. The Domeyko Cordillera represents the Late Eocene-Oligocene magmatic arc of northern Chile that is host to some of the most important copper deposits in the country.
The Exploradora property is subject to an option agreement between Minera Mena Chile Limitada - Iron Creek's Chilean subsidiary (Iron Creek), and Anglo American PLC's Chilean subsidiary, Anglo American Norte S.A. (Anglo American). The Option Agreement was signed on August 26th, 2011 and grants Iron Creek the exclusive right and option to acquire a 100% interest in Anglo American's Exploradora property, subject to the terms and conditions indicated below.
Access to the property is via a good quality dirt road leading off from the Pan-American Highway near Agua Verde. Total journey time from the coastal port town of Taltal in northern Chile is about 3 hours.
Geological Setting of Exploradora
The Exploradora District lies along the highly productive Domeyko Cordillera, which is host to three of the world's top four copper mines. Exploradora consists of a central plutonic complex with a porphyry copper-gold discovery controlled by Codelco on the northeastern margins, and skarn-hosted polymetallic mineralisation at Mina Ciclon to the west and Mina Exploradora to the northwest. The Anglo American properties cover the southern and eastern margins of the plutonic complex, together with a series of low-sulphidation style, epithermal quartz veins, visible in outcrop, in minor trenches, and as abundant float over a broad area. Iron Creek's option agreement will allow the Company to properly explore and evaluate the gold and silver potential of the epithermal veins.
Work Completed To Date
Minor historic exploration of the epithermal quartz veins (by Compañía Minera Orion in the 1990s and by Mariana Resources in 2007) failed to fully explore and test their potential, with most of the exploration directed towards looking for extensions to Codelco's porphyry target onto Anglo American's properties in the northeast.
Anglo American collected 125 rock chip samples of vein material in the Portezuelo and Ladero areas which returned gold grades from trace to 2.16g/t Au at Portezuelo and up to 2.38 g/t at Ladero, together with anomalous silver values up to 169 g/t Ag at Portezuelo and 231 g/t Ag at Ladero. Samples are also generally anomalous in the typical epithermal pathfinder elements such as arsenic and antimony.
Iron Creek collected 10 grab samples which returned values from trace up to 3.45 g/t Au and 65.5 g/t Ag in the Portezuelo area, and anomalous gold < 1 g/t Au with higher silver up to 480 g/t Ag at the topographically lower Ladero veins. Base metals become increasingly important at lower elevations and sampling returned up to 4.75% Pb and 1.62 % Zn in grab samples in the Ladero area.
Quartz vein material in outcrop and in float blocks exhibits classical low sulphidation epithermal textures, including bladed quartz after calcite, colloform and crustiform banding, and brecciation.
Iron Creek completed a detailed geological mapping exercise of the properties in late 2011, and in May 2012 completed the collection of more than 2,000 soil samples from the north-eastern portion of the property, with a series of geochemical anomalies being defined.
Details of the Agreement
The option agreement grants Iron Creek the exclusive right and option to acquire a 100% interest in Anglo American's Exploradora Property, subject to the terms as outlined below:
- Iron Creek to incur cumulative exploration expenses of no less than US$7 million over a period of 4 years, with a firm commitment to invest US$250,000 in the first year of the agreement;
- Upon Iron Creek having exercised its option, Iron Creek will grant Anglo American a 3% NSR royalty payable on commencement of commercial production of all metals from the Property. Three years after exercise of the option, Iron Creek will commence paying to Anglo American an advanced royalty of US$250,000 per year, such payments to be deducted from any future NSR royalty payments due;
- Anglo American having the right and option to acquire through a back-in option a 65% interest in any portion of the Property containing a copper resource as defined by a NI43-101 compliant report:
- Such back-in option will not apply to any precious metals resource identified on the Property by Iron Creek
- If the precious metals resource identified contains an average grade in excess of 0.4% Cu, the back-in option will apply
- The back-in option is exercisable by Anglo American at any time after Iron Creek has exercised the option and within 6 months of Iron Creek having advised Anglo American in writing that Iron Creek has determined the copper resource as indicated above, by paying in cash to Iron Creek two times cumulative exploration expenses incurred to the date of the back-in notification, and by investing in exploration and development of the copper resource to an equivalent of two times Iron Creek's cumulative exploration expenses incurred to the date of the back-in notification
- In the case that Anglo American exercises its back-in option for any copper resource, Iron Creek and Anglo American will enter into an industry standard joint venture agreement for the further exploration and development of the copper resource area, with the initial interests in the joint venture company being 65% (Anglo American) and 35% (Iron Creek). In such case, all advanced royalty payments by Iron Creek to Anglo American relating to any copper resource will terminate.
Qualified Person:
Demetrius Pohl, Certified Professional Geoscientist (CPG), is the Company's Qualified Person as defined by National Instrument 43-101, and is responsible for the accuracy of the technical information in this project summary.
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