(TheNewswire)
Toronto, ON - TheNewswire - January 2, 2024 - AbraSilver Resource Corp. (TSX.V:ABRA ) ( OTC:ABBRF) ("AbraSilver" or the “Company”) is pleased to announce it has enteredinto a binding letter agreement (the “Agreement”) with asubsidiary of Teck Resources Limited (“Teck”), with respect to aproposed option and joint venture agreement (the “OptionAgreement”) to explore and develop the La Coipita copper-goldproject (“La Coipita” or the “Project”) in San Juan, Argentina(the “Transaction”).
The Agreement provides that, subject to certainconditions, AbraSilver and Teck will enter into the Option Agreementto grant Teck an option to acquire an 80% interest in La Coipita byfunding cumulative exploration expenditures of US$20,000,000 over afive-year period, making staged cash payments to, and an equityplacement in AbraSilver totaling US$3,000,000 (including an initialmandatory payment of US$500,000), and making up to US$6,300,000 inoptional cash payments in respect of amounts payable to the underlyingProject vendors. Following an initial transition period during whichAbraSilver will support field operations, Teck will act as operatorfor the duration of the Option.
John Miniotis, President and CEO, commented, “We aredelighted about the opportunity to secure a significant explorationagreement with Teck to advance the large-scale La Coipita project,which is located in a prolific copper porphyry district. Thisstrategic collaboration will mark a significant milestone for theProject, and greatly enhance the potential for a major copperdiscovery. This transaction will represent a strong endorsement ofthe exploration potential at La Coipita and we look forward to workingclosely with Teck to unlock value for all stakeholders.”
Key Terms of the Transaction
Pursuant to the Agreement, AbraSilver and Teck haveagreed to enter into the Option Agreement wherein AbraSilver willgrant Teck an op ti on (the“Option”) to acquire an 80% interest in the Project. The OptionAgreement will provide that Teck may exercise the Op ti on by:
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Making the following payments to or equity placement inAbraSilver:
I. Upfront cash payment ofUS$500,000 upon entering into the Option Agreement;
II. On or before January 31,2025, a cash payment of US$1,000,000 or at Teck’s election,subscription for US$1,000,000 of common shares of AbraSilver (“ABRAShares”) to be priced at the greater of (a) a 25% premium to thepreceding 20-day volume weighted average price on the ABRA Shares onthe TSX Venture Exchange, or (b) C$0.35 per ABRA Share; and
III. On or before January 31,2028, a cash payment of US$1,500,000.
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Incurring an aggregate of US$20,000,000 in explorationexpenditures on the Project over a five-year period; and
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Making up to US$6,300,000 in op ti onal cash payments in respect ofamounts payable to the underlying Project vendors.
Upon exercise of the Op ti on, the par ti es will incorporate a company inArgen ti na (“Newco”) tobecome the ti tleholder ofthe Project. Teck will hold 80% of Newco’s outstanding shares, withAbraSilver holding the remaining 20%. Each party will fund itspro-rata share of future expenditures on the Project through equitycontribu ti ons to Newco orincur dilu ti on in Newco.If a party’s shareholding interest in Newco is diluted below 10% orpursuant to certain other conditions of the Option Agreement, itsshareholding interest will be converted to a 1.1% net smelter returnsroyalty on the Project, of which 0.6% can be bought back by the payorfor a cash payment of US$3,000,000 at any ti me.
The Transaction remains subject to, among other things,the negotiation and execution of a definitive Option Agreement andrelated documents and the satisfaction or waiver of any conditionsprecedent in the Agreement (including the receipt of any requisiteapprovals). The Company and Teck are expecting to enter into theOption Agreement on or about January 14, 2024 but there can be nocertainty that the Transaction will be completed on the termsdescribed in this press release or at all.
The La Coipita Project
The La Coipita project is a district scale propertyconsisting of over 70,000 hectares in the western portion ofCalingasta Department, located in the mining-friendly San JuanProvince of Argentina, adjacent to the Chilean border. Access to thearea is via Calingasta, the nearest town, along 125 km of unpaved roadto the Los Azules Cu-Mo porphyry project and then north along a dirtroad to the La Coipita Cu-Au project. Elevation across the propertyranges between 3,500 and 4,500 MASL with moderate to highrelief.
The Project lies within the Miocene porphyry-epithermalbelt of Argentina and Chile. During the mid-Miocene, the areadeveloped an active magmatic arc, on its western side and a back-arcextensional environment to the east. Contemporaneous with thedeposition of volcanic/volcaniclastic rocks was the emplacement ofporphyry Cu-Mo-Au and/or epithermal Au-Ag (Cu) systems (e.g. Filo delSol high-sulphidation epithermal Cu-Au-Agdeposit with Cu-Au porphyry, Los Pelambres/ElPachón Cu-Mo porphyry, Los Azules Cu-Au-Mo porphyry, ElIndio/Veladero/Pascua Lama high-sulphidationepithermal Au cluster).
Numerous target areas have been identified at LaCoipita. These target areas have coincident geophysical, geologicaland geochemical features that are consistent with copper-goldmineralized porphyry-type intrusions, either beneath high-sulphidationsystems or in structurally uplifted areas. To date, drilling has onlybeen conducted on the La Coipita target, where the initial resultshave identified the potential for a major Cu-Au-Mo porphyry system. Significant exploration upside potential is believed to exist at theLa Coipita target & across multiple other promising regionaltargets (as shown in Figure 2).
Figure 1 –La Coipita Location Map
Figure 2 – La Coipita RegionalExploration Target Areas
Qualified Persons
David O’Connor P.Geo., Chief Geologist forAbraSilver, is the Qualified Person as defined by National Instrument43-101 Standards of Disclosure for Mineral Projects, and he hasreviewed and approved the scientific and technical information in thisnews release.
About AbraSilver
AbraSilver is an advanced-stage exploration companyfocused on rapidly advancing its 100%-owned Diablillos silver-goldproject in the mining-friendly Salta province of Argentina. Thecurrent Measured and Indicated Mineral Resource estimate forDiablillos consists of 53.3 Mt grading 87 g/t Ag and 0.79 g/t Au,containing approximately 148Moz silver and 1.4Moz gold, withsignificant further exploration upside potential. In addition, theCompany has entered into an earn-in option and joint venture agreementwith Teck on the La Coipita project, whereby Teck can fund up to US$20million in exploration expenditures and make certain other payments toearn up to an 80% interest. AbraSilver is listed on the TSX-V underthe symbol “ABRA” and in the U.S. under the symbol“ABBRF”.
For further information please visit the AbraSilverResource website at www.abrasilver.com , ourLinkedIn page at , and follow us on Twitter at
Alternatively please contact:
John Miniotis, President and CEO
Tel: +1 416-306-8334
Cautionary Statements
This news release includes certain"forward-looking statements" under applicable Canadiansecurities legislation. Forward-looking statements are necessarilybased upon a number of estimates and assumptions that, whileconsidered reasonable, are subject to known and unknown risks,uncertainties, and other factors which may cause the actual resultsand future events to differ materially from those expressed or impliedby such forward-looking statements. All statements that address futureplans, activities, events or developments that the Company believes,expects or anticipates will or may occur are forward-lookinginformation. There can be no assurance that such statements will proveto be accurate, as actual results and future events could differmaterially from those anticipated in such statements. Accordingly,readers should not place undue reliance on forward-looking statements.When considering this forward-looking information, readers should keepin mind the risk factors and other cautionary statements in theCompany’s disclosure documents filed with the applicable Canadiansecurities regulatory authorities on SEDAR+ at www.sedarplus.ca. Therisk factors and other factors noted in the disclosure documents couldcause actual events or results to differ materially from thosedescribed in any forward-looking information. The Company disclaimsany intention or obligation to update or revise any forward-lookingstatements, whether as a result of new information, future events orotherwise, except as required by law.
Neither the TSX Venture Exchange nor its RegulationServices Provider (as that term is defined in the policies of the TSXVenture Exchange) accepts responsibility for the adequacy or accuracyof this news release.
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