FULL DISCLOSURE: This is sponsored content for Vortex Metals.
Vortex Metals (TSXV: VMS) this morning revealed that the company has entered into a significant potential transaction. The firm has entered into a non-binding letter of intent to acquire up to an 80% interest in a Chile-based copper project.
Referred to as the Illapel Copper Project, the property is to be acquired from SCM Ventana Minerals Group, with the two firms entering into a 90-day exclusivity period to come to terms under a definitive agreement. The project is drill-ready, with permits already in place. The 8,000 hectare land package is found adjacent to the operating Rio 27 Mine, which is owned and operated by SCM.
“I believe that the Illapel Project combined with our two Mexican copper-gold assets provides Vortex stakeholders with a rare opportunity. Given the geological settings, all three projects possess the potential to be transformative” commented Michael Williams, Executive Chairman of Vortex.
Located 250 kilometres to the north of Santiago, the Illapel project accessed via paved roads, with electricity nearby. The property is suitable for year-round exploration, with the region having been subjected to extensive mining historically. Notably, the El Espino copper-gold project is found just 14 kilometres to the north, while several smaller operations are found in the immediate area.
The aforementioned Rio 27 mine, which is operated by the same party that is optioning Illapel to Vortex, has been in operation since 2010, with 400,000 tonnes of material pulled out of the ground, with grades averaging 1.39% copper. Notably, the currently proposed option agreement includes a right of first refusal on the Rio 27 mine and its associated processing facility.
Under the currently proposed terms of the transaction, Vortex can earn a 60% stake in exchange for $1.1 million in cash, the issuance of 23.0 million common shares, and exploration expenditures of $10.0 million, which is to occur over a period of seven years. Just $350,000 in cash of that is to be paid within the first year of the agreement, including a $200,000 up-front payment.
A final 20% of the asset can be acquired following the completion of a feasibility study. A 2.5% NSR will be applied to the property.
Vortex Metals last traded at $0.145 on the TSX Venture.
FULL DISCLOSURE: Vortex Metals is a client of Canacom Group, the parent company of The Deep Dive. Canacom Group is currently long the equity of Vortex Metals. The author has been compensated to cover Vortex Metals on The Deep Dive, with The Deep Dive having full editorial control. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security.
As the founder of The Deep Dive, Jay is focused on all aspects of the firm. This includes operations, as well as acting as the primary writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay performs freelance writing for a number of firms and has been published on Stockhouse.com and CannaInvestor Magazine among others.