EMX Roy­alty, South32 to ex­plore Ari­zona, N.M., Utah

Stockwatch Daily - - MINES & METALS - Mr. David Cole re­ports

EMX ROY­ALTY Corp. has ex­e­cuted a re­gional strate­gic al­liance agree­ment be­tween its wholly owned sub­sidiary, Bronco Creek Ex­plo­ration Inc. (BCE), and South32 USA Ex­plo­ration Inc., a wholly owned sub­sidiary of South32 Ltd. The agree­ment pro­vides an­nual fi­nanc­ing for gen­er­a­tive work and ac­qui­si­tions over a two-year pe­riod, as well as a frame­work to ad­vance pro­jects of in­ter­est. Gen­er­a­tive work will fo­cus on cop­per and other base me­tal pro­jects within the Laramide and Ter­tiary mag­matic arcs of Ari­zona, New Mex­ico and Utah. Pro­jects ad­vanced to the drill pro­gram stage may be se­lected as des­ig­nated pro­jects. Des­ig­nated pro­jects will ad­vance un­der sep­a­rate op­tion agree­ments pro­vid­ing for work com­mit­ments and cash pay­ments to EMX dur­ing South32’s earn-in pe­riod, and upon earn-in, a 2-per-cent net smelter re­turn (NSR) roy­alty in­ter­est and pre­pro­duc­tion and mile­stone pay­ments to EMX’s ben­e­fit. South32 has ini­tially se­lected five EMX cop­per pro­jects in Ari­zona to be­gin ad­vanc­ing to­ward the drill pro­gram stage. Please see the com­pany’s web­site for

more in­for­ma­tion. Al­liance and com­mer­cial terms over­view (all dol­lar amounts in U.S. dol­lars) Un­der the terms of the agree­ment, which has an ini­tial term of two years, South32 will pro­vide an­nual fi­nanc­ing for gen­er­a­tive work per­formed by EMX per­son­nel to iden­tify prop­er­ties for ex­plo­ration work within the re­gional strate­gic al­liance area of in­ter­est (AOI) that con­sists of the states of Ari­zona, New Mex­ico and Utah, but ex­cludes South32’s Her­mosa project in south­ern Ari­zona. EMX per­son­nel will con­duct ex­plo­ration ac­tiv­i­ties on AEPs with ad­di­tional fi­nanc­ing from South32 in or­der to iden­tify pro­jects suit­able for des­ig­na­tion as des­ig­nated pro­jects. Each des­ig­nated project will be cov­ered by a sep­a­rate op­tion agree­ment pur­suant to which South32 can ac­quire 100 per cent of the project on the terms de­scribed be­low. All gen­er­a­tive and AEP ex­plo­ration ac­tiv­i­ties will be guided by a tech­ni­cal com­mit­tee con­sist­ing of two mem­bers from each com­pany. South32 will pro­vide $800,000 per year to cover the gen­er­a­tive work and the salaries of EMX per­son­nel in­volved in AEP ex­plo­ration work. South32 will also pro­vide a sep­a­rate an­nual ac­qui­si­tion fund of $200,000 to pay for the ac­qui­si­tion of new prop­er­ties as ap­proved by the tech­ni­cal com­mit­tee. AEP ex­plo­ration work will be fi­nanced sep­a­rately through cash calls to South32 in amounts di­rected by the tech­ni­cal com­mit­tee. Des­ig­nated project op­tion agree­ment terms (all dol­lar amounts in U.S. dol­lars) Each op­tion agree­ment cov­er­ing a des­ig­nated project will pro­vide that South32 can earn 100-per-cent in­ter­est in the project by re­im­burs­ing EMX’s hold­ing costs upon ex­e­cu­tion of the op­tion agree­ment, and mak­ing op­tion pay­ments to­talling $525,000 and com­plet­ing $5-mil­lion in ex­plo­ration ex­pen­di­tures dur­ing the five-year term of the op­tion agree­ment.

Upon ex­er­cise of the op­tion by South32, EMX will re­tain an un­capped 2-per-cent NSR roy­alty on the project (not sub­ject to pur­chase or buy down) and re­ceive an­nual ad­vance roy­alty (AAR) pay­ments equiv­a­lent to 50,000 pounds of cop­per com­menc­ing on the first an­niver­sary. All AAR pay­ments are set off against 80 per cent of fu­ture roy­alty pay­ments. In ad­di­tion, South32 will make mile­stone pay­ments as fol­lows (project mile­stones are to Na­tional In­stru­ment 43-101 re­port­ing re­quire­ments):

• 166,000 lb of cop­per (or the cash equiv­a­lent) upon the com­ple­tion of an ini­tial re­source es­ti­mate;

• 333,000 lb of cop­per (or the cash equiv­a­lent) upon com­ple­tion of a prefea­si­bil­ity study;

• 666,000 lb of cop­per (or the cash equiv­a­lent) upon com­ple­tion of a fea­si­bil­ity study.

Ini­tial al­liance ex­plo­ration pro­jects

Five Ari­zona por­phyry-cop­per pro­jects have been se­lected as AEPs by South32, in­clud­ing Mid­night Ju­niper, Jasper Canyon, Sleep­ing Beauty, Dragons Tail and Lomi­tas Ne­gras. EMX and South32 are com­menc­ing work pro­grams on the ini­tial AEPs, as well as ini­ti­at­ing a gen­er­a­tive pro­gram to iden­tify new pro­jects for ac­qui­si­tion. Note, in the fol­low­ing project de­scrip­tions, al­though the ref­er­enced nearby mines and de­posits pro­vide ge­o­logic con­text for EMX’s prop­er­ties, this is not in­dica­tive that the EMX prop­er­ties host sim­i­lar en­dow­ments of min­er­al­iza­tion. Mid­night Ju­niper

The Mid­night Ju­niper project lies at the north end of the Clifton-Morenci min­ing district, ap­prox­i­mately one kilo­me­tre north­west of the Morenci open-pit cop­per mine. The project ge­ol­ogy con­sists of a dis­sected plateau of Ter­tiary age vol­canic cover rocks over­ly­ing a se­ries of Pa­le­o­zoic sed­i­men­tary and Protero­zoic meta­mor­phic rocks that are ex­posed in an ar­cu­ate pat­tern at lower el­e­va­tions along stream cour­ses. Pa­le­o­zoic car­bon­ate rocks con­tain a num­ber of man­ganese ox­ide-rich base me­tal oc­cur­rences in north­east-ori­ented vein, re­place­ment and brec­cia bod­ies typ­i­cal of the dis­tal ex­pres­sion of por­phyry cop­per sys­tems. EMX’s re­con­nais­sance map­ping shows that these oc­cur­rences ap­pear to vec­tor to­ward a sus­pected por­phyry source ly­ing un­der Ter­tiary cover rocks in the cen­tre of the Mid­night Ju­niper land po­si­tion. Jasper Canyon and Sleep­ing Beauty

The Jasper Canyon and Sleep­ing Beauty pro­jects are lo­cated in the Globe-Mi­ami min­ing district. Both prop­er­ties lie on the flanks of the Schultz Gran­ite in­tru­sive com­plex, which is as­so­ci­ated with numer­ous past and cur­rent pro­duc­ing cop­per mines and de­posits in the Globe-Mi­ami and Su­pe­rior min­ing dis­tricts. Por­phyry cop­per de­posits in this re­gion have been dis­mem­bered by numer­ous post­min­eral faults that dis­place up­per lev­els of the min­er­al­ized sys­tems north­east­ward. The Jasper Canyon and

Sleep­ing Beauty pro­jects lie at the east end of a north­ern trend of fault bounded de­posits that in­clude Pinto Val­ley, Di­a­mond H and Cop­per Cities. The Jasper Canyon project lies along the east­ern­most por­tion of this trend and rep­re­sents a fault-bounded and largely cov­ered por­tion of the sus­pected up­per lev­els of a por­phyry cop­per sys­tem in a pre­vi­ously un­ex­plored por­tion of the district. The Sleep­ing Beauty project lies to the west of Jasper Canyon, and di­rectly north of the Cop­per Cities open-pit cop­per mine, and is in­ter­preted to con­tain down-dropped blocks of min­er­al­iza­tion north of the Sleep­ing Beauty fault. Other fault-bounded cop­per de­posits in the district at sim­i­lar struc­tural lev­els in­clude Cop­per Cities, Mi­ami East, Van Dyke and Old Do­min­ion. Dragons Tail

The Dragons Tail project is lo­cated in the Su­pe­rior min­ing district, ap­prox­i­mately eight kilo­me­tres north of the Res­o­lu­tion cop­per de­posit and five kilo­me­tres south­west of Pinto Val­ley. EMX iden­ti­fied a 1.6-kilo­me­tre-long zone of quartz-sul­phide al­ter­ation within Protero­zoic sed­i­men­tary rocks dur­ing re­con­nais­sance work. The out­crops of quartz-sul­phide vein­ing lie be­neath tilted Ter­tiary age vol­canic and con­glom­er­atic cover rocks. His­toric drilling on the east side of the prop­erty in­ter­cepted trans­ported cop­per-ox­ide min­er­al­ized clasts within Ter­tiary con­glom­er­ates, which sug­gests the source of the cop­per lies to the west of the drilling and likely down dip of the min­er­al­ized ex­po­sures. Lomi­tas Ne­gras

The Lomi­tas Ne­gras project is lo­cated ap­prox­i­mately 10 kilo­me­tres south­east of the town of San Manuel, in a broad area of post­min­eral cover rocks. The prop­erty is ringed by Laramide-age in­tru­sive rocks and por­phyry cop­per/skarn de­posits that in­clude San ManuelKala­ma­zoo (about 20 kilo­me­tres north), Cop­per Creek (about 25 kilo­me­tres north­east) and Or­a­cle Ridge (about 10 kilo­me­tres south­west). Nearby out­crops ex­hibit al­ter­ation and anoma­lous base me­tal min­er­al­iza­tion that char­ac­ter­is­ti­cally oc­curs on the mar­gins of por­phyry cop­per sys­tems. EMX’s recog­ni­tion of the al­tered out­crops, com­bined with a new in­ter­pre­ta­tion of the ex­ten­sional struc­tural set­ting of the area, led to the iden­ti­fi­ca­tion of con­cealed por­phyry cop­per tar­gets be­neath the post­min­er­al­iza­tion ped­i­ment cover.

About EMX Roy­alty Corp. EMX lever­ages as­set own­er­ship and ex­plo­ration in­sight into part­ner­ships that ad­vance its min­eral prop­er­ties, with EMX re­ceiv­ing pre­pro­duc­tion pay­ments and re­tain­ing roy­alty in­ter­ests. The re­gional strate­gic al­liance agree­ment with South32 is an ex­cel­lent ex­am­ple of the ex­e­cu­tion of EMX’s roy­alty gen­er­a­tion busi­ness model. The com­pany’s or­gan­i­cally gen­er­ated por­phyry cop­per pro­jects were ac­quired on open ground in pro­duc­tive min­ing dis­tricts, with value es­tab­lished through low-cost, early-stage ex­plo­ration work. The agree­ment’s pro­vi­sions for gen­er­a­tive fi­nanc­ing are cou­pled with the fu­ture up­side po­ten­tial for project work com­mit­ments, pre­pro­duc­tion pay­ments and re­tained roy­alty in­ter­ests based upon ex­plo­ration suc­cess to EMX’s and South32’s mu­tu­tal ben­e­fit.

Dean D. Turner, CPG, a qual­i­fied per­son as de­fined by Na­tional In­stru­ment 43-101 and con­sul­tant to the com­pany, has re­viewed, ver­i­fied and ap­proved the dis­clo­sure of the tech­ni­cal in­for­ma­tion con­tained in this news re­lease.

We seek Safe Har­bor.

Brian Eric Bay­ley, David Mor­rell Cole, Brian Ken­neth Levet, Ge­orge Kok Chean Lim, James An­drew Mor­ris, Larry Mi­noru Okada, John Terry Rickard, Michael Dempsey Winn

(EMX) Shares: 80,437,555

Newspapers in English

Newspapers from Canada

© PressReader. All rights reserved.