Farallon satisfied with Minera Summit agreement

Ownership of the Mexican mineral concessions Campo Morado and La Alina, already under option to Farallon Resources (VSE), is being sought by Summex Mines (VSE).

In October 1995, Farallon signed a deal with the Villagran Garcia family, a controlling shareholder of Minera Summit, to acquire the concessions, which comprise 150 sq. miles of a volcanogenic massive sulphide district in the state of Guerrero.

The company can acquire ownership from the private Mexican company by paying US$1.2 million and issuing 750,000 shares in three stages by Jan. 31, 1998. Farallon intends to spend US$2.4 million on exploration over the same period of time.

Summex, on the other hand, entered into an agreement with David Hermiston to buy all the issued and outstanding shares of Minera Summit. The agreement was reached in December 1994 and was set to close in February of last year. However, the parties have now agreed to extend the closing date to March 31, 1996.

The transaction calls for the Minera Summit to receive 2 million shares of Summex, plus a maximum of 1.2 million shares for debt settlement.

Summex has called on Farallon to relinquish all title rights and interest in the concessions, and assign them to Minera Summit.

Robert Hunter, chairman of Farallon, responded to Summex’s claim by stating the company acquired a valid option agreement from Minera Summit, and that the agreement was duly executed by the authorized signatories of Minera Summit, who are also its lawful shareholders. Farallon is satisfied with the results of its own due diligence review of title matters.

Meanwhile, the company is proceeding with full-scale exploration of the Campo Morado project, which includes an additional 59 sq. miles of wholly owned concessions. A helicopter-borne geophysical survey is under way and a 22-mile access road into the heart of the property area is being upgraded — all in preparation for drilling.