Nov 4 2010
Alturas Minerals Corp. (TSX VENTURE:ALT)(BVLAC:ALT) announced that its 100% Peruvian subsidiary Alturas Minerals S.A. has entered into an agreement with the Origen Group S.A.C, on its 100% owned 900 hectare Pampa Colorada claim located in northern Peru.
Under the Agreement, Alturas assigns Origen the right to mine iron ore from the Claim for a period of ten years in consideration for royalty payments to Alturas based on the tonnes of iron ore extracted. The Agreement stipulates that a minimum royalty will be paid to Alturas for each year regardless of production.
Miguel Cardozo, Chairman and Interim President and CEO of Alturas commented, "The Company welcomes this new and important partnership with Origen, which is an important promoter of iron ore mining development in Peru. This mining agreement forms part of our ongoing strategy to share exploration and development expense and risk at some of our key projects, whilst the Company's focuses its resources on its flagship properties. The Pampa Colorada property contains massive magnetite-hematite mineralization outcropping over extensive areas, which constitutes the primary exploration and development target for Origen. Based on the existence of strong copper and gold rock anomalies we believe that, in addition to the significant iron potential, there is also good discovery potential for semi-concealed iron oxide copper-gold (IOCG) mineralization".
According to the Agreement signed on October 29, 2010, Alturas will receive from Origen a royalty per ton of iron ore extracted from Pampa Colorada, priced as described in the table below. As part of this commitment Origen will pay Alturas a Minimum Advance Royalty as shown below.
The Minimum Advance Royalty payment is subject to a "Force Majeure" clause which includes among other non-controllable events any drop in the price of iron ore below US$130/tonne CIF. In such event Origen would have the right to suspend mining operations for up to 3 years whilst at the same time paying Alturas scaled penalty payments until such time that operations recommence or either party chooses to cancel the Agreement. Origen, after giving a 90 days written notification to Alturas S.A., will have the right to cancel this contract without any further payment obligations. Notwithstanding the latter, Origen will be fully liable for the payments of all licenses, permits, taxes and other holding costs. In addition Origen assumes full liability for all environmental matters including all remediation costs generated by the mining operation.
The Agreement also anticipates that a separate option agreement ("the Option") may be negotiated in the future by both parties.
Among other terms to be negotiated as part of the Option, Alturas and Origen are interested in discussing the 100% acquisition of the Claim by Origen provided the deposit contains mainly an iron ore resource. In this case, Origen would pay Alturas a cash consideration equivalent to US$0.30 per tonne of iron ore defined in the qualified mineral reserve/resource estimate plus a royalty equivalent to US$0.60 for each additional tonne of iron ore mined from the property.
If the event that the deposit contains mainly a copper/gold resource, Origen would have the right to buy 40% of the Claim, in which case both parties would contribute proportionally towards the development of the project. If Origen elects not to contribute, it would have the right to receive a 1% NSR royalty.
About the Pampa Colorada Iron-Copper-Gold project
The 900 hectare Pampa Colorada project is located 730 kilometers northwest of Lima in the department of Cajamarca in northern Peru, next to a major highway that connects to the coastal city of Chiclayo. The project is 15km north of the copper-gold-molybdenum Cañariaco porphyry deposit, forming part of the same belt that hosts other major copper-gold-molybdenum porphyry deposits such as La Granja, Galeno, Minas Conga and Michiquillay. Alturas acquired 100% of the property through staking in 2005. At Pampa Colorada, Late Jurassic volcanic rocks have been intruded by andesitic, dioritic and dacitic stocks of probable Tertiary age. Strong hydrothermal alteration occurs over an area of approx. 2.5 x 1.0 kilometers and, within this broader area, a north-south corridor of more intense silicic, pyrrhotitic, magnetitic and hematitic alteration, brecciation and stockworking covers an area of at least 1.50 x 0.25 kilometers. Alteration and mineralization correlate with a distinct ferruginous colour anomaly. Strong copper (max. 0.12%), gold (max. 1.20 grams/tonne), silver (max. 22.3 grams/tonne) and zinc (max. 0.31%) anomalies have been confirmed in reconnaissance outcrop sampling by Alturas, corresponding to zones of massive hematite, magnetite and pyrrhotite alteration, and/ or quartz-sulfide stockworking. The Company believes that the features described are consistent with the upper levels of a mineralized Iron Oxide Copper-Gold (IOCG) system. No reportable resource or reserve has yet been defined on the property.