AXG Mining (ASX: AXC) is very close to the completion of the acquisition of Halston Exploration, which holds the rights to earn up to a 75% interest in two southern Peru properties prospective for copper and gold, with the company now proceeding to settlement.
AXG has fulfilled the conditions precedent associated with the acquisition including completing due diligence on Halston and Lara Exploration’s (TSX: LRA) business and operations including all the Condoroma and Coporaque Mineral Concessions.
In September last year, AXG announced it had signed binding Letters of Intent with Lara Exploration to earn up to a 75% interest in the Condoroma and Coporaque properties.
The properties consists of 24 mineral concessions covering 17,764 hectares and are located 75 kilometres from one another in the southern part of the Cusco Region.
Substantial surface geochemical sampling and mapping of the property by Lara has identified several prospective targets.
Significantly, the properties are close to and along the same structure as large mines and development projects such as Xstrata’s (LSE: XTA) Tintaya mine and Las Bambas and Antapaccay development projects.
Both Condoroma and Coporaque are drill ready with strong exploration targets and are close to existing infrastructure providing a low cost of exploration.
The properties are located along the prominent and highly prospective copper-gold mineralisation Belt, Andahuaylas-Yauri, which has a long history of mining.
Peru is widely considered one of the best mining jurisdictions in the world ranking third globally in copper production, fourth in the world in molybdenum production and is Latin America’s largest producer of gold.
With a strong mining culture and a large pool of experienced workers, Peru is ranked sixth globally and second in Latin America in terms of attracting exploration investment.
Condoroma
The geology of the Condoroma property appears to be consistent with that of other large copper-gold porphyry and skarn systems in Peru.
Significant surface mineralisation and structural features cross the property and trend towards the Tintaya-Antapaccay deposits to the northwest.
Ground geophysics (IP survey) has revealed conductive targets along this trend which AXG intends to drill test in the upcoming exploration campaign.
Under the terms of the agreement with Lara, AXG has entered into a two-stage option whereby it can earn 55% of the rights and interests of the Condoroma property by making staged payments to Lara of US$800,000 and spending US$3.5 million on exploration over three years.
AXG can then boost its stake to 75% with a further $1 million cash payment, $7 million, three year exploration expenditure and the completion of a Prefeasibility Study within four years of executing the option to increase its interest.
Coporaque
The Coporaque property has the potential to host large porphyry mineralisation consistent with the geology and mineralisation of the area.
Limited mapping and surface geochemistry has already revealed outcrops of porphyry with gold-copper-molybdenum mineralisation.
The focus of the exploration campaign will be to identify the size of the porphyry body and to locate additional mineralised bodies.
To acquire its initial 55% interest in the Coporaque property, AXG must make staged payments to Lara totalling $650,000 and spend $3 million on exploration over three years.
In early December, AXG released a prospectus offering shareholders up to 170 million shares in the company at a price of A$0.009 per share to raise up to $1.53 million.
The company has completed the minimum subscription and first tranche of the offer of 34.8 million shares.
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News - AXG Mining finalises acquisition of copper, gold project in Peru
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