VANCOUVER, BC, June 27,
2023 /CNW/ - Vortex Metals Inc. (TSXV: VMS) (FSE:
DM8) (OTCQB: VMSSF) ("Vortex" or the "Company") is pleased to
announce that it has entered into a non-binding Letter of Intent
(LOI) for an option to acquire up to an 80% Interest in the Illapel
Copper Project, with SCM Ventana Minerals Group, a Santiago, Chile based mining Company. The
parties have agreed to a 90-day exclusivity period to negotiate the
definitive agreement.
Illapel Copper Project
Highlights:
- Favorable Geology Extends north and south from
the Mineralization at the Rio 27 Mine
- Exploration Permits Obtained for Drilling and Exploration
- High-Priority Drill-Ready Targets Identified
- Access to Paved Roads, Power Grid and Water
- 8,000 Hectare Prospective Land Package
- Adjacent to the Rio 27 Mine and Processing Plant
- Year round drilling
- Low Elevation- 1500 metres above sea level
"I believe that the Illapel Project combined with our
two Mexican copper-gold assets provides Vortex stakeholders with a
rare opportunity. Given the geological settings, all three projects
possess the potential to be transformative", said Vortex Chairman
and Founder Michael
Williams.
Project Overview
The Illapel Copper Gold project is located in the Commune of
Illapel, Choapa Province of the Fourth Region of Chile and is 250 km north of Santiago. The nearest town is the mining
centre of Illapel located 35 kilometres away. The project has
excellent infrastructure connecting paved roads, electricity, and
mild climate favourable to year-round exploration. Illapel is fully
permitted for exploration, and drilling may potentially
commence immediately following the execution of the definitive
agreement.
The region surrounding Illapel has seen extensive
mining activity, both past and present. Of particular note,
the El Espino copper-gold (IOCG)
Project (Engineering feasibility complete; awaiting environmental
permits. Source: www.pucobre.cl) is located approximately 14km to
the north, and is presently planned for development by Pucobre.
Several small gold and copper mines also operate in the
immediate área.
Rio 27 Mine
The Illapel Project is adjacent to an existing mining operation
owned by Ventana Group and known as the Rio 27 mine. The Rio
27 mine has been in production since 2010 with its near-site
processing plant. Ventana has advised that to date, approximately
400,000 tonnes of mineralized material with an average grade of
1.39% copper has been processed at site. The LOI provides a
right of first refusal (ROFR) on the Rio 27 Mine and processing
facility.
Vikas Ranjan, Chief Executive
Officer and a Co-Founder of Vortex Metals, stated that Vortex
Metals is thrilled to announce the option to acquire a highly
prospective exploration project, adjacent
to, and extending from, an
existing mining operation. Chile
is the largest copper producer in the world, accounting for
approximately 28% of global copper production. In our view one of
the best ways to make a discovery is to explore by an existing
mine. We believe that with the Illapel Copper property, we
will acquire an extremely prospective project that is
drill-ready.
Geology and
Mineralization
At Illapel, stratabound mineralization of
copper (chalcocite and bornite) and
silver is hosted in Jurassic and Lower
Cretaceous continental sedimentary and
volcaniclastic rocks to the east of the Manquegua Fault.
The Manquegua Fault is a regional feature separating the Farellon
Sanchez Intrusive formation to the west from the sandstone
volcano-sedimentary formations to the east where the Rio 27
Mine is located. Mineralization in the Río 27 Mine is
cupro-argentiferous with primary chalcocite and bornite hosted
in mantos, veins and lesser breccias.
Exploration
Mineralization at the Rio 27 mine is associated with
NNE-trending structures and felsic dykes where they are intersected
by WNW-trending structures and ocoite (andesite porphyry) dykes. A
vertical control is also present, with certain stratigraphic units
being more favorable to manto-style mineralization. The favorable
geology extends immediately north and south from the mineralization
at Rio 27, and comprises high-priority targets that may be tested
early in the program.
The favorable structure and dykes, with cross-cutting ocoite and
associated copper oxides, are found at multiple locations within
the project area, and represent high-quality targets for
exploration and drilling.
Finally, gold-bearing epithermal veins are found in the
western portion of the project area, and represent additional
targets for exploration and drilling in and of themselves.
Terms and Conditions of the
Illapel Copper Deal
The transaction is subject to several conditions including the
negotiation of a definitive agreement and the approval of the TSX
Venture Exchange. The parties have agreed to a 90-day
exclusivity period to negotiate the definitive agreement. The
material terms and conditions of the non-binding LOI are as
follows:
Stage 1 – 60% interest
Vortex will have the right to earn a 60% interest in the Illapel
Project by making cash payments, issuing Vortex Shares, and
incurring exploration expenditures in accordance with the following
schedule.
Deadline
|
Cash Payments
(USD)
|
Vortex Shares
Issuance
|
Exploration
Expenditures1
|
Five business
days following
the satisfaction
or waiver of all
conditions
precedent in
the Definitive
Agreement.
|
$200,000
|
n/a
|
n/a
|
No later than
twelve (12)
months after
the Effective
Date
|
$150,000
|
n/a
|
n/a
|
No later than
twenty-four (24)
months after
the Effective
Date
|
$200,000
|
3,000,000
|
2,000,000
|
No later than
thirty-six (36)
months after
the Effective
Date
|
$275,000
|
n/a
|
$1,000,000
|
No later than
forty-eight (48)
months after
the Effective
Date
|
$275,000
|
n/a
|
$2,000,000
|
No later than
sixty (60)
months after
the Effective
Date
|
n/a
|
5,000,000
|
$5,000,000
|
Completion of
Pre-Feasibility
Study in no
later than
seventy-two
(72) months
after the
Effective Date
|
n/a
|
15,000,000
shares
|
n/a
|
Vortex may extend
the time to complete the pre-feasibility study by a further 12
months by increasing the cash portion of the First Option
obligation by $200,000
|
Completion of
Pre-Feasibility
Study in no
later than
eighty-four (84)
months after
the Effective
Date
|
200,000
|
15,000,000
shares.
|
|
Totals
|
$1,100,000/$1,300,000
|
23,000,000
(subject to
a 19.9%
cap
calculated
on the
issued and
outstanding
common
shares of
Vortex (the
"Cap")
|
$10,000,000
|
1
If Vortex spends USD
10,000,000 in exploration expenditure but decides not to exercise
the stage one option, then the Definitive Agreement will terminate,
additional 5,000,000 Vortex shares will be issued, and the
ownership of the Project will remain with Ventana. Vortex will then
be granted a Net Smelter Royalty (NSR) of 1.5% on the entire
project, encompassing all mining claims subject to this agreement
with maximum amount recoverable through the NSR being capped at USD
10,000,000.
|
Stage Two – Additional 20% interest (80% total)
Following the exercise of the First Option, Ventana will grant
Vortex an option to earn an additional 20% interest in the Project
(the "Second Option") by completing a feasibility
study on the Project. The Second Option will be deemed to be
validly exercised upon the completion of the feasibility study on
the Project as described above.
Once Vortex exercises the Second Option, it will arrange project
financing for 100% of the project, including Ventana's share of 20%
which will be recovered from commercial production.
Ventana will also be granted a Net Smelter Royalty (NSR) of 2.5%
on the entire project, encompassing all mining claims subject to
this agreement from the effective date of this
agreement. Vortex will have a right to buy 0.5% of the NSR by
paying USD 1.75M at any time from the
effective date of this agreement.
All Vortex Shares issuable pursuant to the Definitive Agreement
will be subject to a 24-month contractual escrow from the date of
issuance. 25% of the Vortex Shares will become free trading every 6
months following the date of issue. It is expected that Ventana
will nominate one person to the board of Vortex following the
definitive agreement becoming effective.
Qualified Person / Quality Control
and Quality Assurance
Dr. John E. Larson, Ph.D., is a
qualified person ("QP") as defined by NI 43-101 and has reviewed
and approved the technical content of this press release.
About Vortex Metals Inc.
Vortex Metals Inc. is the parent company of Mexican subsidiary
Empresa Minera Acagold, S.A. de C.V., which is the owner of a 100%
interest in two drill-ready high-potential
copper volcanogenic massive sulfide (VMS) properties
(Riqueza Marina and Zaachila)
in the state of Oaxaca, and a third high-potential gold
property (El Rescate) in the state of Puebla.
The Oaxaca projects incorporate the most highly
prospective areas of high-grade copper mineralized surface
exposures ('gossans') and prominent gravity anomalies along an
emerging copper VMS belt that includes Minaurum Gold's
(TSXV:MGG) Santa Marta project.
Forward-Looking
Statements
This press release may contain forward looking statements that
are made as of the date hereof and are based on current
expectations, forecasts and assumptions which involve risks and
uncertainties associated with our business including permitting
approvals, any private placement financings, the uncertainty as to
whether further exploration will result in the target(s) being
delineated as a mineral resource, capital expenditures, operating
costs, mineral resources, recovery rates, grades and prices,
estimated goals, expansion and growth of the business and
operations, plans and references to the Company's future successes
with its business and the economic environment in which the
business operates. All such statements are made pursuant to the
'safe harbour' provisions of, and are intended to be
forward-looking statements under, applicable Canadian securities
legislation. Any statements contained herein that are statements of
historical facts may be deemed to be forward-looking statements. By
their nature, forward-looking statements require us to make
assumptions and are subject to inherent risks and uncertainties. We
caution readers of this news release not to place undue reliance on
our forward-looking statements as several factors could cause
actual results or conditions to differ materially from current
expectations. Please refer to the risks set forth in the Company's
most recent annual MD&A and the Company's continuous disclosure
documents that can be found on SEDAR at www.sedar.com. The
Company does not intend, and disclaims any obligation, except as
required by law, to update or revise any forward-looking statements
whether as a result of new information, future events or
otherwise.
The Company cautions that mineralization on, or production from,
neighbouring properties is no guarantee of the existence of similar
mineralization or a guarantee of future production from the Illapel
Project.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
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SOURCE Vortex Metals