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VANCOUVER, British Columbia, April 19, 2021 (GLOBE NEWSWIRE) — Patagonia Gold Corp. (“Patagonia” or the “Company”) (PGDC.TSXV) announces it has entered into definitive agreements to acquire two projects in the Deseado Massif of southern Argentina. Patagonia entered into a definitive option agreement dated April 15, 2021 (the “Option Agreement”) with Mirasol Resources Ltd. (“Mirasol”) and Mirasol’s wholly owned subsidiary Australis S.A. (“Australis” and together with Mirasol, the “Vendors”), which grants Patagonia an option to acquire a 75% undivided interest in and to Australis’ rights and interest in the Homenaje project (the “Homenaje Project” or “Homenaje”) located in Santa Cruz Province, Argentina. Patagonia also entered into a definitive transfer agreement dated April 15, 2021 (the “Transfer Agreement”) with the Vendors, which grants Patagonia a 100% undivided interest in and to Australis’ rights and interest in the Nico project (the “Nico Project” or “Nico”) located in Santa Cruz Province, Argentina.
Summary of the Terms of the Definitive Agreements
Pursuant to the Option Agreement, Patagonia has an option to earn a 75% managing, joint venture interest in the Homenaje Project over six years upon achievement of the following (collectively, the “Earn-In Obligations”):
- an initial work program over six years of $2,550,000 in exploration expenditures, including 2,500 meters of drilling, on the Homenaje Project;
- expenditures on exploration activities with respect to the Homenaje Project (the “Exploration Expenditures”) of a minimum commitment of US$400,000 over the first 18-months;
- following completion of the initial Exploration Expenditures and drilling obligations due within the first 30 months, Patagonia must complete a minimum of $400,000 of Exploration Expenditures in any 12-month period, and a minimum of $200,000 of Exploration Expenditures in any six-month period; and
- a pre-feasibility study, prepared in accordance with National Instrument 43-101 – Standards of Disclosure for Mineral Projects for a mineral resource of not less than 300,000 contained ounces of gold equivalent.
Upon Patagonia completing the Earn-In Obligations, Patagonia and the Vendors will hold 75% and 25%, respectively, in a joint venture company holding the Homenaje Project. If either party’s equity interest is diluted below 10%, it will convert to a 2% net smelter return (“NSR”) royalty.
Pursuant to the terms of the Transfer Agreement, Patagonia has acquired the Vendors’ interest in the Nico Project in exchange for a 1.5% NSR royalty. If, by the end of the third year, the Nico Project has not been operated as a producing mine, or Patagonia has not produced and shipped minerals in commercial quantities (excluding bulk sampling or pilot plant operations, if any) from the Nico Project for a period of 30 consecutive days, Mirasol will have the right to regain full ownership of the Nico Project at no cost to Mirasol.
Christopher van Tienhoven, CEO of the Company, stated “We are pleased to secure these properties and we look forward to our exploration and mining team commencing work on them. New discoveries at Homenaje and Nico are expected to have synergies with our nearby Cap-Oeste project and our Martha mine and mill, respectively”.
Overview of the Projects
Homenaje occurs within a +11,050-hectare land package abutting the Company’s El Tranquilo block on the west-southwest. From its exploration activities, consisting of geologic and geophysical mapping, sampling and geochemical analyses, Mirasol defined several northwest-trending, anomalous areas within the favorable, Jurassic-aged Chon Aike Formation – the major host to mineral deposits in the Deseado Massif. Homenaje Project is just three kilometers south-southwest of Patagonia’s Cap-Oeste mine. No drilling has been conducted at Homenaje to date.
Nico occurs within a large (+77,700-hectare) land package in the central part of the Deseado Massif. It is traversed by a major, provincial highway and is situated about 45 kilometers north of Patagonia’s Mina Martha mine and mill. Work by Mirasol and others at Nico, consisting of geologic and geophysical mapping, sampling and geochemical analyses, has defined four (4) areas of interest: Endeavor, Aurora, Vittoria, and Resolution. Highly anomalous gold and silver values, up to 35 g/t Au and +6,100 g/t Ag, were defined from Mirasol’s geochemical work. Eleven (11) core holes were completed on the Tito structures in the Endeavor target in 2009, which yielded values up to 2.25 grams per tonne (g/t) Au and 197 g/t Ag (within 1.25 meters, drill length).
Qualified Person’s Statement
Donald J. Birak, an independent geologist and Registered Member of SME and Fellow of AusIMM and the qualified person as defined by National Instrument 43- 101, has reviewed and approved the scientific and technical content of this press release.
About Patagonia Gold
Patagonia Gold Corp. is a mining and development company listed on the TSX Venture Exchange. The Company seeks to grow shareholder value through exploration and development of gold and silver projects in the Patagonia region of Argentina. The Company is primarily focused on the Calcatreu project in Rio Negro and the development of the Cap Oeste underground project. Patagonia, indirectly through its subsidiaries or under option agreements, has mineral rights to over 420 properties in several provinces of Argentina and Chile and is one of the largest landholders in the Province of Santa Cruz, Argentina.
For more information, please contact:
T: 403 617 7609
Christopher van Tienhoven, Chief Executive Officer
Patagonia Gold Corp.
This news release contains certain forward-looking statements, including, but not limited to, statements with respect to the Company’s acquisitions of interests in the Homenaje Project and the Nico Project, including in respect of the Earn-In Obligations, and the conditions for it to retain its interest in the Nico Project, as well as development of the Company’s mining operations and the Company’s future plans, intentions and expectations. Wherever possible, words such as “may”, “will”, “should”, “could”, “expect”, “plan”, “intend”, “anticipate”, “believe”, “estimate”, “predict” or “potential” or the negative or other variations of these words, or similar words or phrases, have been used to identify these forward-looking statements. These statements reflect management’s current beliefs and are based on information currently available to management as at the date hereof.
Forward-looking statements involve significant risk, uncertainties and assumptions. Many factors could cause actual results, performance or achievements to differ materially from the results discussed or implied in the forward-looking statements. These factors should be considered carefully and readers should not place undue reliance on the forward-looking statements. Although the forward-looking statements contained in this news release are based upon what management believes to be reasonable assumptions, the Company cannot assure readers that actual results will be consistent with these forward-looking statements. The Company assumes no obligation to update or revise them to reflect new events or circumstances, except as required by law.
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.