American copper giant Cyprus Amax Minerals (CYM-N) has optioned the Chimborazo property in Chile to Inmet Mining (IMN-T) and Agate Bay Resources (ABE-V).
The option agreement permits Inmet and Agate Bay to earn an 100% interest in the property by making option payments totalling US$10 million over three years plus (if the option is exercised) an advance royalty payment of not less than US$35 million. Cyprus would retain a royalty interest in the property.
Agate Bay will have the right to earn a 60% interest in the property, subject to a reduction to 40% in the event Inmet elects to make certain specified expenditures. Inmet and Agate Bay will fund expenditures under the Cyprus option agreement on a pro rata basis, with Inmet making the initial US$2-million option payment to Cyprus, and Agate Bay funding the first US$3 million worth of work on the property.
In 1997, operators will carry out a US$3-million work program in an effort to confirm the horizontal continuity in the known part of the deposit, while drilling will attempt to expand the existing resource.
Situated near the Escondida and Zaldivar copper operations, Chimborazo is a large supergene copper deposit that is amenable to open-pit mining and bioleaching.
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