Hannan and JOGMEC partner at San Martin copper-silver project in Peru
Hannan Metals Ltd. [HAN-TSXV; HANNF-OTC] has signed a binding letter agreement for a significant option and joint venture agreement with Japan Oil, Gas and Metals National Corp. (JOGMEC). Under the Agreement, JOGMEC has the option to earn up to a 75% beneficial interest in the San Martin Project by spending up to US$35,000,000 to deliver to the joint venture (JV) a feasibility study, subject to regulatory approval. The San Martin Project covers 656 km2 of Hannan’s 940 km2 Peruvian holdings. Hannan will continue to progress exploration on its remaining Peruvian projects.
The agreement grants JOGMEC the option to earn an initial 51% ownership interest by funding US$8,000,000 in project expenditures at San Martin over a 4-year period, subject to acceleration at JOGMEC’s discretion. JOGMEC’s minimum commitment is to fund US$1,000,000 from 01 April 2020 to 31 March 2021 and JOGMEC has agreed to reimburse Hannan for all project related costs from 01 April 2020;
JOGMEC, at its election, can then earn:
- an additional 16% interest for a total 67% ownership interest by achieving either a prefeasibility study or funding a further US$12,000,000 in project expenditures in amounts of at least US$1,000,000 per annum (for a US$20,000,000 total expenditure);
- subject to owning a 67% interest, a further 8% interest for a total 75% ownership interest by achieving either a feasibility study or funding a further US$15,000,000 in project expenditures in amounts of at least US$1,000,000 per annum (for a US$35,000,000 total expenditure);
Should JOGMEC not proceed to a prefeasibility study or spend US$20,000,000 in total, Hannan shall have the right to purchase from JOGMEC for the sum of US$1.00, a 2% participating interest, whereby Hannan Metals’ participating interest will be increased to 51% and JOGMEC’s participating interest will be reduced to 49%.