Exploration & Growth Opportunities Rio Tinto Option Agreement
On February 23, 2020, Calibre and Rio Tinto Exploration (“Rio Tinto”) entered into an option earn-in agreement (the “Earn-in Agreement”), pursuant to which Rio Tinto can earn up to a 75% interest in Calibre’s 100%-owned Borosi Projects in Northeast Nicaragua. The Borosi Projects host both gold-silver and copper-gold resources in two areas as well as multiple lesser explored copper-gold skarns, low-sulphidation epithermal gold-silver vein systems and bulk tonnage copper-gold porphyry targets.
Furthermore, the Company and Rio Tinto have entered into a strategic exploration alliance agreement (the “Alliance Agreement”) under which we will work together to identify and acquire exploration concessions in Nicaragua, with a focus on copper-gold porphyry, skarn and epithermal precious metal systems. All amounts below are expressed in US dollars.
Earn-in Agreement Highlights:
- First Option: Rio Tinto shall have a five-year option to acquire a 55% interest in the Borosi Projects by incurring $10,000,000 in qualifying expenditures, of which $3,000,000 is committed to be incurred within two years of obtaining the necessary permits and approvals.
- Second Option: If Rio Tinto exercises the First Option and earns a 55% interest in the Borosi Projects, it has the right to earn an additional 10% interest (for an aggregate interest of 65%) by incurring an additional $15,000,000 over a three-year period.
- Third Option: If Rio Tinto exercises the Second Option and earns a 65% interest in the Borosi Projects, it has the right to earn an additional 10% interest (for an aggregate interest of 75%) by incurring an additional $20,000,000 over a subsequent three-year period.
- Calibre has been designated as the initial operator of the field work being completed under the Earn-in Agreement and will receive a fee equal to 10% of expenditures.
Alliance Agreement Highlights:
- Calibre and Rio Tinto entered a five-year generative exploration and concession acquisition alliance under which we will work together to identify prospective mineral properties.
- Rio Tinto has the right to instruct Calibre to acquire selected alliance properties and will fund the acquisition of those properties.
- Calibre will receive a fee for acting as the operator of the alliance equal to 10% of qualifying expenditures.
- Rio Tinto shall have the right to designate one or more blocks of the alliance properties (each such block not to exceed 40,000 hectares in the aggregate) and shall have the exclusive option to earn up to a 80% interest in each such block, on the following terms and conditions:
- First Option: Rio Tinto shall have a five-year option to acquire a 55% interest in the applicable block by incurring $5,000,000 in qualifying expenditures.
- Second Option: If Rio Tinto exercises the First Option and earns a 55% interest in the applicable block, it shall have the right to earn an additional 10% for an aggregate interest of 65%) by incurring an additional $5,000,000 over a five-year period.
- Third Option: If Rio Tinto exercises the Second Option and earns a 65% interest in the applicable block, it shall have the right to earn an additional 15% for an aggregate interest of 80%) by incurring an additional $15,000,000 over a five-year period.
The Borosi concessions are located approximately 275 kilometres northeast of the capital city of Managua. The concessions cover a total of 667 km2 within Nicaragua’s Mining Triangle, an area defined by the historic mining towns of Bonanza, Rosita and Siuna. One of Central America’s most prolific mining regions, the Mining Triangle is reported to have produced 7.9 million ounces of gold, 4 million ounces of silver and 305 million pounds of copper.
Two historic mines operated on the Borosi concessions as recently as the early 1980s: the La Luz-Siuna mine, which produced approximately 2.3 million ounces of gold; and the Rosita mine, which produced approximately 305 million pounds of copper. Both deposits are skarn-type deposits which are commonly found in proximity to copper-gold porphyry systems. Several smaller past producing gold mines are also located on the Borosi concessions: the La Luna, Riscos de Oro and Blag mines.
Calibre’s 100%-owned concessions at Borosi, which total 667 km2, are the subject of the Earn-in Agreement. The concessions include the formerly producing La Luz-Siuna mine, the Santa Maria Gold-Silver project and the Primavera Gold-Copper Porphyry project. The Borosi Projects host gold-silver and gold-copper NI 43-101 Resources at the Cerro Aeropuerto skarn and the Primavera gold-copper porphyry deposits [click here for Summary of Borosi Projects Inferred Resources].