Camino Minerals Corporation (“Camino” or the “Company”) (COR: TSX-V) is pleased to announce that it has signed a Letter of Intent (LOI) with Arcelia Gold Corp. (“Arcelia”) that sets out the terms upon which the Company can acquire from Arcelia the sole and exclusive right and option to acquire up to an 80% interest in the El Secreto Gold, Silver and Copper project (“El Secreto” or the “Property”) located Sinaloa State, Mexico.
El Secreto consists of three mineral concessions encompassing over 12,675 hectares (49 square miles) and is located approximately 100 kilometres north-east of Mazatlan, Sinaloa State, at the southern end of the Laramide copper-gold porphyry belt. The geology and mineralization obtained to date suggests that El Secreto is highly prospective for the discovery of both mesothermal gold-silver vein systems and copper-gold porphyry systems. The Property is accessible by paved and gravel roads.
Recently consolidated by Arcelia through staking and the acquisition of privately held claims, El Secreto contains several historical artisanal gold and silver workings. A surface sampling program carried out by Arcelia in 2010 returned a number of assays grading above 1 g/t gold to a maximum of 11.9 g/t gold and silver values up to 187 g/t. In addition, anomalous copper, lead, zinc and molybdenum values have also been obtained throughout the area. El Secreto has never been subject to modern exploration techniques or drilling.
“El Secreto is an attractive early-stage property that can be advanced to the drill stage in a rapid and cost effective manner,” said Gordon Davis, Camino’s CEO. “El Secreto represents a new, exciting discovery opportunity for Camino and we look forward to advancing it.”
The LOI provides the Company with the exclusive right for a period of 45 days to negotiate the terms of a definitive option agreement with Arcelia in respect of the Property based on the terms set out in the LOI.
The parties have agreed that the consideration payable by Camino in order to acquire up to a 60% interest in the Property will consist of total cash payments of USD$200,000, the issuance of 2,000,000 Camino common shares and incurring exploration expenditures in the amount of USD$4,000,000 over a four year period as more particularly described in the tables below (the “First Option”). The cash portion will be paid in five installments with the first payment being made by Camino on the date that the LOI was signed.
Date for Option Payment | Amount USD$ | Share Issuance |
On execution of the LOI (paid) | $25,000 | |
Within five business days of Regulatory approval | $50,000 | 500,000 |
On or before the 2nd anniversary of the Option Agreement | $25,000 | 500,000 |
On or before the 3rd anniversary of the Option Agreement | $50,000 | 500,000 |
On or before the 4th anniversary of the Option Agreement | $50,000 | 500,000 |
TOTAL | $200,000 | 2,000,000 |
Work Commitment Date | Exploration Expenditures USD$ |
On or before the 1st anniversary of the Option Agreement | $500,000 |
On or before the 2nd anniversary of the Option Agreement | $1,000,000 |
On or before the 3rd anniversary of the Option Agreement | $1,000,000 |
On or before the 4th anniversary of the Option Agreement | $1,500,000 |
TOTAL | $4,000,000 |
The parties have agreed that the definitive option agreement will also provide for Arcelia to retain a net smelter royalty of 2% in the Property. Camino will be able to reduce the net smelter royalty to 1% by making a USD$1,500,000 cash payment to Arcelia.
In addition to the First Option outlined above, Camino will also be granted the sole and exclusive right and option to earn and acquire an additional 10% undivided interest in the Property (the “Second Option”). If Camino wishes to exercise the Second Option, it must give written notice to Arcelia (the “70% Notice”) to this effect within 90 days of having exercised the First Option and complete, at its cost, a National Instrument 43-101 Standards for Disclosure for Mineral Projects (“NI 43-101”) compliant resource estimate and a Preliminary Economic Assessment (as such term is defined in NI 43-101) within two (2) years of the 70% Notice.
In addition to the First Option and Second Option, Camino will also be granted the sole and exclusive right and option to earn and acquire an additional 10% undivided interest in the Property (the “Third Option”). If Camino wishes to exercise the Third Option, it must give written notice to Arcelia (the “80% Notice”) to this effect within 90 days after the date that Camino has exercised the Second Option and complete, at its cost, a NI 43-101 compliant feasibility study with respect to placing the Property into commercial production within four (4) years of 80% Notice.
Upon exercising its First Option (or Second Option or Third Option, as applicable), the Company and Arcelia have agreed to enter into a joint venture agreement to further explore and evaluate the Property.
Under the terms of the LOI, Arcelia has granted the Company a 45-day exclusivity period in order to negotiate and finalize the terms of the definitive option agreement. The option agreement will remain subject to, among other things, board approval and all necessary regulatory approvals, including the approval of the TSX Venture Exchange.
About Arcelia Gold Corp.
Arcelia is a private Canadian company focused on the acquisition of early-stage precious and base metal projects in Mexico and finding partners to advance them. Arcelia’s President and CEO is Alain Charest. Mr. Charest has over 25 years of experience in mineral exploration and has participated in a number of significant discoveries. As exploration manager for Francisco Gold Corp. he discovered the El Sauzal gold deposit, located in Chihuahua State, which has produced over 1.5 million ounces of gold (Goldcorp’s website). Mr. Charest was also involved in the discovery of the 5 million ounce (gold equivalent) Marlin deposit in Guatemala. Mr. Charest is a professional geologist who completed his geological engineering studies at the University of British Columbia in 1993.
About Camino Minerals Corporation
Camino is a new, well-funded mineral exploration company that was formed in connection with Goldcorp’s C$300-million acquisition of Canplats Resources Corp. Camino is led by Canplats’ former management and is focused on precious and base metal projects located in Mexico. For more information on Camino’s properties, and associated agreement terms, please refer to the Company’s website at www.caminominerals.com
The technical information contained in this news release has been reviewed and approved by Richard Dufresne, P.Geo., Camino’s V.P., Exploration, a “Qualified Person” as defined under NI 43-101.
For further information, contact:
Corporate Information:
Camino Minerals Corporation
R.E. Gordon Davis
Chairman and C.E.O.
Direct: (604) 629-8292
Investor Inquiries:
Blaine Monaghan
V.P., Corporate Development
Direct: (604) 629-8294
Toll-Free: (866) 338-0047
[email protected]
www.caminominerals.com
To receive Camino’s news releases, contact Blaine Monaghan, V.P., Corporate Development, at [email protected] or (866) 338-0047.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Cautionary Note Regarding Forward-Looking Statements
Statements contained in this news release that are not historical fact are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995 and forward-looking information under the provisions of Canadian securities laws (collectively, “forward-looking statements”). Such forward-looking statements are subject to risks and uncertainties which could cause actual results to differ materially from estimated results. Such risks and uncertainties include, but are not limited to, the company’s ability to raise sufficient capital to fund exploration, changes in economic conditions or financial markets, changes in prices for the company’s mineral products or increases in input costs, litigation, legislative, environmental and other judicial, regulatory, political and competitive developments in Mexico, technological and operational difficulties or inability to obtain permits encountered in connection with exploration and development activities, labour relations matters, and changing foreign exchange rates, all of which are described more fully in Camino’s filings on SEDAR. The company undertakes no obligation to publicly update or otherwise revise any forward-looking statements, whether as a result of new information, future events or other factors, except as required by law. Readers are cautioned not to place undue reliance on forward-looking statements.
