Power Americas Signs Letter of Intent to Acquire the Farellon Cobalt, Copper, Gold Project
ACCESS Newswire
VANCOUVER, BC / ACCESSWIRE / March 1, 2017 / Power Americas Minerals Corp. (PAM.V) ("Power Americas" or the "Company") is pleased to announce that it has signed a Letter of Intent (the"LOI") with Red Metal Resources Ltd. ("Red Metal") to acquire on the exercise of three separate options a one hundred percent (100%) interest in the Farellon Property, a one hundred percent (100%) interest in the Perth Property and a one hundred percent (100%) interest in the Mateo Property. The three projects are located 150 km southwest of Copiapo, Chile, in the prolific Candelaria iron oxide copper-gold (IOCG) belt of Chile's coastal Cordillera, host to the Mantoverde mine and Lundin Mining Corporation's Candelaria mine.
Option Terms
Pursuant to the LOI, Power Americas can acquire 100% of Red Metal's Farellon, Perth, and Mateo Properties in exchange for aggregate consideration of twenty-five million (25,000,000) common shares of Power Americas Minerals Corp. and a one-time payment of US$250,000.
The completion of the transaction is subject to a number of conditions including, but not limited to, TSX Venture Exchange ("TSXV") approval.
Power Americas may exercise the first option (the "First Option") to acquire a one hundred percent (100%) interest in the Farellon Property by issuing ten million (10,000,000) common shares in the capital of Power Americas and making a one-time cash payment of US$250,000 to Red Metal within 5 business days of receiving acceptance by the TSX Venture Exchange (the "TSXV") to the transaction.
Provided Power Americas exercises the First Option it may exercise an additional option (the "Second Option") and earn an undivided 100% interest in the Perth Property by issuing to Red Metal ten million (10,000,000) common shares in the capital of Power Americas or ten million (10,000,000) Special Warrants within six months from the date the First Option has been exercised. Each Special Warrant will be exercisable into one common share in the capital of Power Americas without further consideration.
Subject to Power Americas exercising the Second Option it may exercise the final option (the "Third Option") and earn an undivided 100% interest in the Mateo Property by issuing to Red Metal five million (5,000,000) common shares in the capital of Power Americas or five million (5,000,000) Special Warrants within six months from the date the Second Option has been exercised. Each Special Warrant will be exercisable into one common share in the capital of Power Americas without further consideration. There are no work commitments with any of the Property Option Agreements.
The Farellon Property is drill ready for immediate definition drilling and the potential estimation of a mineral resource. Power Americas will focus future exploration drilling on the cobalt ("Co") and silver ("Ag") potential of the property, in addition to the copper ("Cu") and gold ("Au") potential of the property. Cobalt has never been a primary focus of exploration and not all drill holes were analyzed for cobalt. Significant intercepts in drill holes that were analyzed for cobalt include: FAR-96-010 3m @ 1.3% Cu, 0.37g/t Au and 0.55% Co and FAR-11-001 3m @ 6.08% Cu, 0.58g/t Au and 0.13% Co.
Farellon Property
The Farellon Property includes a 100% interest in six claims and an option to earn a 100% interest in two additional claims. Two claims on the Farellon Property have remaining payments of US$75,000 each to the underlying vendors. The property is located 150 km southwest of Copiapo, Chile, and consists of a total of 1,234 hectares in the Carrizal Alto mining district, more precisely 3 km southwest of the historic Carrizal Alto mine. It is easily accessible year-round by dirt roads and is located in close proximity to power, water and a major urban centre, Copiapo, with a readily available mining workforce. The eight mining claims have net smelter royalties ("NSR") of 2.5% registered to a variety of holders, with an option to buy back up to 1.5% of all NSR's for an aggregate payments of US$3,850,000.
Historical records indicate that copper mining commenced at Carrizal Alto in the 1820s and continued on a significant scale, mostly by British companies until 1891 when disastrous flooding occurred and the mines were closed. Historical reports indicate that the larger mines were obtaining good grades over significant widths in the bottom workings at the time of closure. It is estimated that during this period, over 3 million tonnes of mineralized material with grades in excess of 5% copper and widths of 8 m were extracted, including a large quantity of direct shipping mineralized material at 12% copper (Source: Ulriksen, C. (1991), Carrizal Alto Mining District, Vallenar, III Region, Chile, 7 p.).
Work completed to date on the Farellon Property has been focused on a 1.6 kilometre stretch of mineralized veins hosted in a 10 to 25-metre-wide shear zone, a further 2.5 kilometres of this shear zone have been explored on surface and show similar geology and mineralization on surface as the zone that had been previously drilled. A total of 6,992 metres of drilling has been completed in three programs along a 1.3 km strike length. The property has been primarily explored for copper and gold, but there is unexplored potential for cobalt and silver on the property. The following table summarizes some of the best results obtained to date.
HOLE_ID
From (m)
To (m)
Length (m)
Cu (%)
Au (g/t)
FAR-96-007
25
34
9
1.05
0.38
FAR-96-009
62
65
3
2.24
0.67
FAR-96-009
72
83
24
1.01
0.57
FAR-96-010
45
48
3
1.3
.37
FAR-96-015
59
79
20
.98
.99
FAR-96-022
29
39
10
1.31
1.53
FAR-96-022
100
108
8
2.49
3.72
FAR-96-023
132
147
15
1.42
0.60
FAR-96-024
33
36
3
2.89
0.94
FAR-96-025
65
85
20
1.22
0.97
FAR-09-B
75
86
11
0.67
1.35
FAR-09-C
77
82
5
4.16
2.57
FAR-11-001
36
49
13
2.51
0.35
FAR-11-001
36
44
8
3.95
0.53
FAR-11-001
37
43
6
5.09
0.64
FAR-11-006
80
112
32
1.35
0.99
FAR-11-006
84
96
12
2.18
2.10
FAR-13-002
47
54
7
2.15
0.28
The table above shows grades and widths of mineralization which are consistent with historic drilling results and have also given valuable geological information showing multiple veins and the potential for wide zones of economic mineralization. The true width of the drill hole intersections cannot be determined from the information available, as it was RC drilling.
In 2014, Red Metal entered into a contract with a Chilean artisanal miner allowing the artisanal miner to mine on the Farellon property in return for a 10% net sales royalty. In January 2015, the artisanal miner began selling mineralized material to ENAMI, a Chilean national mining company, and to date has sold approximately 10,000 tonnes of sulphide mineralized material grading 1.82% Cu, 6.56 g/t Ag and 0.25 g/t Au, as well as 1,813 tonnes of oxide mineralized material grading 1.56% Cu. Silver grades recovered during the mining operations demonstrates the unexplored potential for silver on the property. (Source:RMES Annual and Quarterly Reports).
In April 2015, the artisanal miner received all the necessary permits allowing them to increase their operations from 500 tonnes per month to 5,000 tonnes per month. Continued expansion of the Farellon property's small-scale mining operation, through minimal capital expenditures, could significantly increase revenues and provide important geological and metallurgical information.
Perth Property
The Perth Property consists of 12 mining claims totaling 2,245 hectares in the Carrizal Alto mining district. It is contiguous to the Farellon Property, but geologically different. The property has a 2.5% NSR on it with an option to buy back up to 1.5% of the NSR for aggregate payments of US$1,000,000.
The property has been known to host gold and copper mineralization since the early 1900's when it was part of the Carrizal Alto mining complex. Modern exploration on the property started in 2008 and multiple surface mapping, trenching and drilling programs have been completed. More than 12 mineralized veins have been identified on the property. Significant results obtained from surface channel sampling are listed in the table below.
Sample ID
Northing
Easting
Elevation
Length
Au g/t
Cu %
778
6895914.00
308888.00
772
Reconnaissance
16.50
2.87
1962
6893308.58
308065.74
648
1.10
15.26
0.93
1977
6895153.72
308780.84
714
2.10
14.43
0.72
2938
6895006.00
308352.00
888
0.50
14.00
3.62
1960
6893313.57
308068.57
648
1.10
9.77
1.36
2975
6894308.00
308364.00
727
0.40
8.92
1.84
1903
6892715.11
307888.80
588
0.60
8.52
1.56
1952
6892720.24
307889.38
588
1.50
8.37
2.14
1961
6893307.92
308066.42
647
1.10
8.14
2.83
1923
6893265.79
308261.54
622
0.30
7.60
1.04
1921
6893260.81
308515.88
638
0.40
7.38
2.43
1913
6893501.66
308143.50
687
0.60
6.73
7.16
252
6892373.78
307952.33
581
0.35
6.48
1.32
1821
6896660.00
309450.00
671
1.10
5.86
4.09
1813
6896586.00
310019.00
584
1.30
5.71
2.88
3037
6895254.00
308254.00
901
0.30
5.26
8.76
2951
6894414.00
308406.00
741
0.55
4.89
2.08
1972
6895140.00
308797.00
778
1.20
4.75
1.68
1975
6895151.55
308790.60
757
1.40
4.47
5.90
2007
6897060.00
309956.00
563
1.50
4.07
3.78
1905
6893092.03
308001.35
660
0.80
3.13
3.98
Mateo Property
The Mateo Property is a copper-gold-silver project consisting of mining 7 claims totalling 500 hectares located approximately 10 km east of Vallenar.
The property has undergone limited modern exploration including surface and underground RC drilling and artisanal mining on three separate mine sites, the Irene, Margarita and Santa Theresa mines.
In 2011, Red Metal carried out an in-depth geological mapping and sampling program on the property. A total of 138 reconnaissance samples were collected. The highest assay values returned from reconnaissance samples were 21 g/t Au and 10.3% Cu, with more common values ranging between 1-3 g/t Au and 1-3% Cu. Detailed mapping identified nine significant mineralized zones where further work is recommended.
About Power Americas Mineral Corp
Power America's acquisition strategy focuses on acquiring affordable, cost effective and highly regarded mineral properties in areas with proven geological potential. These areas include historical and currently producing mines with existing infrastructure. This strategy includes acquiring 100% interests in mineral properties, with no payment terms or work program commitments that would threaten a junior mining company's financial stability. The Company believes it can create maximum shareholder value efficiently and cost effectively implementing this acquisition strategy.
The Company believes that the demand profile for Cobalt, Lithium, Copper, and other essential power related materials will be fundamentally led by the growing adaptation of electric vehicles, renewable energy and increased production of super alloys. With a focus on identifying and developing ethically sourced materials within the Americas, the Company intends to address the growing demand for energy metals that are being driven by innovation and the introduction of new technologies.
Power Americas Minerals Corp. is a Canadian-based junior mining exploration company focused on the procurement, exploration and development of cobalt, lithium, copper and other energy metals in North and South America. The Company's shares are listed and posted for trading on the TSX Venture Exchange under the symbol "PAM" and on the Frankfurt Exchange under the symbol "VV0".
This transaction is subject to standard closing conditions including a 60-day due diligence period, the parties completing a definitive agreement and the receipt of TSX Venture Exchange ("TSXV") approval.
The technical content of this news release has been reviewed and approved by James Place, P. Geo., a director of the Company, and a qualified person as defined by National Instrument 43-101.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
