Austral expands land holding in Chile

PERTH (miningweekly.com) – Junior gold developer Austral Gold has struck a deal with TSX-listed Revelo Resources to secure 12 500 ha of mining concessions in Chile, to expand its Amancaya project.

The mining concessions currently form part of Revelo’s San Guillermo project, which comprises more than 24 000 ha of exploration and mining tenements, with much of the property remaining unexplored.

Austral told shareholders on Tuesday that the project was mainly prospective for low sulphidation epithermal precious metals veins similar to those found at the Amancaya and El Penon projects.

Under the terms of the agreement with Revelo, Austral would conduct a staged investment over a three-year period in order to gain full ownership of the properties.

The ASX-listed junior would commit to spend $3-million over the three-year period, starting from the date of the binding agreement, while also making a cash payment of $650 000 over the same period. A final optional cash payment of $2-million would be subject to exploration results.

The concessions comprising the properties were subject to royalty agreements, with payments varying between 1.5% and 4.5% of net smelter returns, depending on the location of the concession within the properties. Revelo would be entitled to 0.5% of the royalties payable, with the remainder payable to the previous owners of the properties.

However, options were available to reduce or exit the royalty agreements.

Austral said on Tuesday that in addition to the earn-in costs, the company would also cover the cost of the yearly payments for the mining rights for 2015, and subsequent years during the term of the agreement.