Penoles options El Nino

Under an agreement with Toronto-based Diadem Resources (DIR-V), Mexican silver producer Industrias Peoles is earning an interest in the El Nino claim, west of the San Nicolas deposit held by Western Copper Holdings (WTC-T) and Teck Cominco (TEK-T).

Under the 3-year option agreement, inked last July, Peoles must spend US$105,000 on exploration in the first year and thereafter perform the yearly minimum work commitment. Peoles also has to pay the annual surface taxes, which amount to US$25,000 in 2001.

After payments of US$30,000 at the end of the first year, US$50,000 at the end of the second, and US$70,000 at the end of the third, Peoles gets outright title to the El Nino property. Diadem retains a net smelter return of 1.5% on any production.

Situated 15 km west of San Nicolas, El Nino comprises 179 sq. km. It covers an exposure of the Chilitos formation, a horizon known to host volcanogenic massive sulphide deposits.