Kobrea Exploration optioning seven copper projects, Argentina
Kobrea Exploration Corp. [CSE-KBX] signed exclusive option agreement, dated Aug. 14, 2024, to acquire up to a 100% interest in certain mineral properties in the Mendoza province of Argentina (the Western Malargue copper projects or the Properties), subject to a 1.5% net smelter return (NSR) royalty in favour of the optionors.
Highlights: Seven projects comprising a total of 73,334 hectares (733 km2). Two mapped and sampled copper/gold/molybdenum porphyry systems by Vale Exploration Argentina; 12 porphyry targets identified in historical exploration.
No historical drilling; neighbouring projects granted drill permits for the first time in 2024; road access and nearby infrastructure; five-year option agreement for Kobrea to earn a 100% interest in the property portfolio.
“The execution of the option agreement represents a major milestone for the company. The properties feature underexplored copper/gold/molybdenum porphyry systems within a world-class porphyry belt where, in 2024, several neighbouring projects have had drilling permits granted for the first time,” commented James Hedalen, CEO.
The Western Malargue copper projects lie within the Neogene porphyry belt that straddles the border between central Argentina and Chile. This world-class belt includes the Los Bronces/Rio Blanco and El Teniente porphyry copper deposits, representing the second largest and third-largest copper deposits in the world, respectively, in terms of contained copper. The properties are 80 km south of El Teniente and 70 km west of the city of Malargue.
Seven mineral properties covering 73,334 hectares comprise the Western Malargue copper projects: Sofi, El Perdido, Mantos de Cobre, Cuprum, Elena, Veronica and El Destino. The properties are considered highly prospective for porphyry copper and porphyry copper-gold deposits.
Several porphyry targets have been outlined at surface by previous operators, most notably Vale Exploration Argentina between 2010 and 2013, although no drilling has been completed on the properties to date. Copper porphyry targets outlined to date exhibit multi-kilometre hydrothermal alteration footprints, anomalous copper-plus-or-minus-gold-plus-or-minus-molybdenum geochemistry, quartz stockwork veining, localized hydrothermal breccias and Miocene-aged dacitic-to-dioritic porphyry intrusions.
The government of Mendoza has been working to promote mineral exploration and mining the province of Mendoza over the past several years. Through Impulsa Mendoza SA, a vehicle adopted by the Province of Mendoza, it is seeking to develop a modern and sustainable mining sector.
The Western Malargue mining district (WMMD) is a tool developed by the government of Mendoza through Impulsa Mendoza SA to respond to the challenge that the energy transition represents for the world. Impulsa Mendoza has developed a detailed environmental impact study in the entire WMMD area. It has also carried out studies of geological and infrastructure potential to shorten the times required for the exploration of mining projects.
“These studies have made it possible to determine that the region is very suitable for mining development as it has enormous geological potential and there is no competition for the use of land or water with any other productive activity,” stated Impulsa Mendoza.
To exercise the option under the option agreement, the company must, over the five years of the option agreement term: Issue to the optionors up to 3.5 million common shares of the company as follows: 100,000 shares within 10 days of the date of the option agreement; 100,000 shares within six months of the effective date; 150,000 shares within one year of the effective date; 300,000 shares within two years of the effective date; 500,000 shares within three years of the effective date; 700,000 shares within four years of the effective date; and 1.65 million shares within five years of the effective date.
Make cash payments to the optionors in the aggregate amount of up to US$6.76 million as follows; US$10,000 within five business days of the date the parties entered into a letter of intent with respect to the option agreement (paid); US$250,000 within 10 days of the effective date; US$250,000 within six months of the effective date; US$500,000 within one year of the effective date; US$500,000 within two years of the effective date; US$750,000 within three years of the effective date; US$1 million within four years of the effective date; and US$3.5 million within five years of the effective date.
Notwithstanding the payment and share issuance requirements described here, the company may earn a partial interest in the properties.
For the purposes of the NSR royalty, the properties are divided into five distinct areas, and the company will be entitled to repurchase the 1.5% NSR royalty in respect of an NSR area for $US1.5 million per NSR area (or US$7.5 million for the NSR royalty in respect of all of the properties).
Kobrea Exploration holds the rights to acquire up to a 100% interest in the Western Malargue copper projects, situated in Mendoza province, Argentina. Kobrea also holds a 100% interest in the Upland copper project in British Columbia, Canada.