Duran Ventures Inc. (TSXV:DRV) announced that it has entered into an agreement under which it will option its Minasnioc gold-silver project in Peru to the Peruvian subsidiary of IAMGOLD Corp. (TSX:IMG,NYSE:IAG).
As quoted in the press release:
The Agreement between the companies is comprised of three options. On signing the Agreement IAMGOLD will pay Duran $50,000 US and will have until December 31, 2018 to secure access rights agreement with the local community and enter into the First Option period. Should IAMGOLD be unable to secure community access rights it can extend the period until December 31, 2019 by giving notice to Duran and by paying the Company an additional $50,000 US prior to January 4, 2019. Initial consultation with the local community has commenced and the Company is confident that a community agreement will be reached in 2018.
Upon securing the community agreement, IAMGOLD has the right to enter into the First Option to earn a 60% interest in the Property over a 4 year period. As a condition of the First Option IAMGOLD must carry out sufficient drilling to determine a resource estimate and issue a Preliminary Economic Assessment prepared in accordance with National Instrument 43-101 standards (the “PEA”) demonstrating a minimum gold resource of 300,000 ounces. During the term of the First Option IAMGOLD will be also required to make payments to Duran totalling $500,000 US as follows:
- On entering First Option: $ 75,000
- First Anniversary of entering the First Option $100,000
- Second Anniversary of entering the First Option $100,000
- Third Anniversary of entering the First Option $100,000
- Fourth Anniversary of entering the First Option $125,000
The Second Option will allow IAMGOLD to earn an additional 10% (total of 70%) in the Property over 4 years by completing a prefeasibility study in accordance with NI 43-101 standards (the “PFS”). The PFS must have a Measured and Indicated Resource of at least 1 million ounces of gold. Should IAMGOLD fail to produce the PFS as specified above it will still maintain its 60% interest in the Property.
Within 10 days of IAMGOLD vesting in Second Option if Duran requests, and IAMGOLD agrees, IAMGOLD will enter a Third Option in which it can increase its ownership in the Property to 75% (the “Third Option”) by arranging financing for Duran’s 25% share of exploration, feasibility and mine development and construction costs. The financing will be done at Libor plus 8%.
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