Southwestern and Vale Sign Option Agreement for Antay Projectadmin
Southwestern Resources Corp. announce that its wholly owned subsidiary has entered into an option agreement with Vale Exploration Peru S.A.C., a subsidiary of Companhia Vale do Rio Doce, respecting Southwestern’s 100% owned Antay copper-molybdenum project, located in southern Peru.
Under the terms of the Agreement, Vale has the option to earn a 51% interest in the Antay Project by making cash payments totaling US$1.35 million, completing a total of 13,500 metres of diamond drilling (including 3,000 metres in the first year) and completing a scoping study over a three-year period (the “Option”). Vale will have the additional right to earn a further 9% interest by funding and completing a bankable feasibility study within two years of exercising the Option (the “Additional Option Period”). Vale may elect to extend the Additional Option Period by 12 months by paying Southwestern US$1 million.
In addition, within two years of delivering a bankable feasibility study, Vale will have the further option to make a binding, all cash offer to acquire Southwestern’s remaining 40% interest within 90 days of Vale’s decision to construct a mine, at which point Southwestern will have 120 days to accept Vale’s offer, or to negotiate a better all cash offer from a third party.
The 31,000 hectare Antay Project is situated within the Bambas-Tintaya Porphyry Belt and is accessible by road from Cuzco, 150 kilometres to the northeast. The Sayta Porphyry, which is situated in the northern section of the Antay Project, is a large porphyry system exposed over 1.5 kilometres and consists of multi-phase porphyritic intrusions, sheeted and stock-work quartz vein zones and hydrothermal breccia bodies. Work carried out by Southwestern in 2008 included mapping, sampling and geophysical surveying and it has recently commenced a 2,400 metre drilling program.
Timo Jauristo, the Company’s Interim President and CEO, commented that: “We look forward to working with Vale to advance the Antay Project. Vale’s position as one of the largest mining companies in the world, as well as its presence in South America, will provide us with invaluable expertise respecting exploration of the Antay Project. This Agreement, along with our previously announced joint ventures, has put the Company in a strong position to advance its Peruvian projects with the assistance of prominent mining partners.”