Explor Resources Inc. is pleased to announce that it has signed an option agreement with Teck Resources Limited whereby Teck could earn up to a 70% interest in the Timmins Porcupine West gold property, located in the Timmins-Porcupine Mining Camp in Ontario.
First Option
Explor grants Teck the option to acquire an initial 55% interest in the Property (the "First Option") which Teck may exercise by incurring an aggregate of CDN$8,000,000 in committed and optional expenditures by May 1, 2019 (the "due date"). If Teck does not incur the listed expenditures by their due date, Teck may pay cash in lieu of the shortfall to maintain the First Option. Teck may terminate the First Option at any time prior to exercising the First Option, so long as Teck returns the Property within 30 days in good standing.
Second Option
Teck will have a further option (the "Second Option") to earn an additional 15% interest in the TPW Property (the "additional Interest") by sole funding an additional $4 million in expenditures prior to May 1, 2022, for an aggregate of $12 million on the Property prior to May 1, 2022. If Teck does not incur the listed expenditures by their due date, it may pay cash in lieu of the shortfall to maintain the Second Option. If Teck exercises the Second Option the Property shall be owned as to Teck 70% and Explor 30% interest.
Joint Venture
If Teck exercises the First Option, the parties shall participate in exploration and development of the Property through a joint venture (the "Joint Venture"), which shall be formed on the date the Second Option is exercised or expires unexercised. Thereafter, each party shall fund its prorata share of future expenditures on the Property or incur dilution via a standard industry formula. If a party's interest in the Property is diluted below 10%, its interest will be converted to a 5% net profits royalty. Upon formation of the Joint Venture, Teck will be the operator so long as it holds the largest interest.
Private Placement
Teck will participate in a private placement for the subscription of 3,500,000 units at a price of CDN$0.09 per unit for a total amount of CDN$315,000. Each unit is composed of one common share and one half (1/2) of a share purchase warrant (the "Warrant"). Each whole warrant gives the right to subscribe for one common share of the Corporation at a price of $0.10 per share, for a period of 12 months and at a price of $0.15 per share for an additional period of 12 months. The securities that will be issued at the closing of this private placement will be subject to a hold period of four months and one day from closing. This placement is subject to the final approval of the TSX Venture Exchange.
The Property
The Timmins Porcupine West gold property consists of 185 unpatented mining units and 3 patented claims located in the Bristol and Ogden Townships in the Timmins-Porcupine Mining Camp for a total 3,200 hectares. The property is contiguous with Lakeshore Gold West Timmins Mine. Highway 101 bisects the property and provides access from the city of Timmins located 13 km to the east.
The Property has been explored since 1927 by numerous ground geophysical surveys and diamond drilling of up to 111 holes. In 1984, Dome Exploration discovered and delineated a gold mineralized zone that was approximately 350 meters long and 45 meters wide and open below 350 meters of vertical depth. Following Explor's exploration program, the strike length of the gold mineralization was increased to greater than 2000 meters. The continuity of mineralization continued to be confirmed, and the structure remained open at depth below 600 meters. Explor intersected gold mineralization in 113 out of 118 holes.