Prime Meridian Resources Corp. Secures Option to Purchase the Historic La Verde Grande Cu-Zn-Ag- Au Mine in Sonora State, Mexico
December 09, 2021 at 02:19 pm EST
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Prime Meridian Resources Corp. announced that the Company has executed a letter of intent (LOI) providing it with the right to purchase up to a 100% interest in the La Verde Grande Cu-Zn-Ag-Au Mine and surrounding concessions (the "La Verde Project" or the "Project"). The La Verde Project is located in central Sonora State, Mexico, approximately 50 km northwest of the city of Hermosillo. The La Verde Project comprises nine mineral concessions covering 2,493 hectares. The Company's plan is to fast-track the exploration and development of the seven currently known Cu-Zn-Ag-Au skarn zones, while evaluating in parallel, the significant opportunity for the discovery of copper porphyry mineralization proximal to those skarn zones. Access to the La Verde Project is via paved highway and improved gravel road that ends directly at the main
historical workings near the center of the property. Local infrastructure includes proximity to a major city, an
adjacent paved highway, close proximity to electrical power lines, an abandoned plant site on the property. The
Project is located in a major mining district with available processing facilities. The climate within the property
area is arid to semi-arid, which is typical of lower elevations in the Sonoran Desert. Seasonal rains occur
between June and September, the planned exploration and development work can be conducted year-round.
Transaction Details
PMR will make cash payments of USD 400,000 and make common share payments having a total value of
up to USD 8,000,000 to acquire up to a 100% indirect ownership of the La Verde Project subject to a 2%
royalty.
PMR will be bound to make the above USD 400,000 cash payment and upon completing the payment, PMR
will have earned a 5% indirect ownership in the La Verde Project.
PMR will acquire a further 45% interest in the new Mexican company (resulting in the indirect acquisition of
50% of the La Verde Project) upon the issuance of 25 million common shares of PMR to GMP, priced at a
deemed value of CAD 0.15 per common share.
PMR will acquire an additional 25% indirect interest in the La Verde Project upon the issuance of an
additional USD 3,000,000 in common shares of PMR at any time before the first anniversary of the TSX
Venture Exchange approval of the Purchase Option and priced at the VWAP of the 10 trade-days
preceding the payment subject to such price being no lower than the price of the common shares issued in
the first installment in above and no higher than USD 0.50.
PMR will earn a final 25% indirect interest (cumulative 100%) in the La Verde Project upon the issuance of
an additional USD 2,000,000 in common shares of PMR at any time before the second anniversary of the
TSX Venture Exchange approval of the Purchase Option and priced at the VWAP of the 10 trade-days
preceding the payment subject to such price being no lower than the price of the shares in the first
installment in above and no higher than USD 1.00.
All common shares issued by PMR under the terms of the Purchase Option, will be subject to a three-year
time-release escrow which will begin on the date of the TSX Venture Exchange approval of the Purchase
Option.
In the event that PMR earns less than a 100% interest in the Project the vendor and PMR will form a joint
venture for the further development of the Project based on their respective interests.
PMR will receive all revenue and profits from production from the Project from the date of TSX Venture
Exchange approval provided it continues to increase its interest by making the share issuances on the first
and second anniversaries, failing which the revenues and profits will be apportioned between the vendor
and PMR in accordance with their respective interests.
The vendor will also receive a Net Smelter Royalty ("NSR"), registered with the Mining Ministry of Mexico, of
2.0% on all production from the skarn-style mineralization ("Skarn NSR"); and 2.0% on all production from the
porphyry mineralization ("Porphyry NSR") with an assignable right in favour of PMR, to buy back 1% of the
Porphyry NSR for USD 1.0 million.
Sonoran Desert Copper Corporation is a Canada-based exploration company. The Company is focused on the development of its energy metals project portfolio, including the South Uchi lithium project in Red Lake, Ontario, Canada and the Cuatro Hermanos copper/molybdenum porphyry project in Sonora, Mexico. The Cuatro Hermanos Porphyry Copper Project (the 4H Project) is approximately 185 kilometers southeast of Hermosillo. The Company is in the process of exploring and evaluating resource properties. The Companyâs exploration and evaluation assets include Bruce and Camping Lake, Ontario; Bluffy Lake, Ontario; Dixie Lake, Ontario; Kelly Palladium, Ontario; Pakwash, Red Lake, Ontario; La Verde Project, Sonora, Mexico; La Sarita Copper-silver Project, Sonora, Mexico, and EI Chuin Copper Project, Sonora, Mexico.