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Mirasol options 75% of Chile gold belt projects to Yamana

27th March 2015

By: Henry Lazenby

Creamer Media Deputy Editor: North America

  

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TORONTO (miningweekly.com) – Latin America-focused project generator Mirasol Resources has optioned 75% of the Gorbea belt projects, in Chile, to Canadian miner Yamana Gold.

Under the joint venture agreement, the option would be exercisable in three stages over a seven-year period that would see Yamana act as a strategic partner in the exploration and potential development of Mirasol's Atlas and Titan projects.

Subject to a 45-day due diligence review period, the first stage of the deal would give Yamana the option to earn a 51% interest after spending $10-million and cash payments to Mirasol of $2-million over four years.

The first-year spend commitment would be $2-million, including geophysical surveys and 2 000 m of exploration drilling at the two projects.

"We are pleased that Mirasol has partnered with Yamana, which has agreed to commit significant resources to the Gorbea projects where recent exploration by Mirasol has identified several compelling drill targets at the Atlas and Titan projects. Yamana is an important gold producer with operating mines in Mirasol's focus countries of Chile and Argentina,” Mirasol CEO Stephen Nano advised.

Yamana had recently made a construction decision on its high-grade gold/silver Cerro Moro project, in the Santa Cruz province of Argentina, where Mirasol maintained a significant portfolio of drill-ready projects.

Yamana senior VP for exploration William Wulftange noted that the option agreement underscored the company’s commitment to explore and expand its footprint in Chile, focusing on high-quality opportunities that could lead to long-term growth.

Yamana might exercise the second earn-in option to increase its interest to 65% within the subsequent two-year period by completing a National Instrument (NI) 43-101-compliant technical report, comprising a preliminary economic assessment based on an indicated mineral resource estimate of more than one-million ounces of gold at a 0.3 g/t cutoff grade.

Further, Yamana had the choice to exercise the third earn-in option to increase its interest to 75% by completing a feasibility study and making a positive project construction decision.

Subject to a decision to mine and a request by Mirasol, Yamana would then be required to provide financing to Mirasol for its 25% share of the development costs. Mine financing would be on commercial terms with interest calculated at Libor plus 3%.

Mirasol's share of the mine development costs would be repaid from half of its share of the cash flow, resulting from its interest in the mine.

The Gorbea projects comprised nine claim blocks of about 20 700 ha, in the Miocene-age mineral belt of northern Chile. The Gorbea projects included Mirasol's Atlas and Titan high-sulphidation gold and silver projects and seven other early-stage exploration prospects covering portions of prospective alteration systems.

Edited by Tracy Hancock
Creamer Media Contributing Editor

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