Prime Meridian Resources Corp. Executes LOI for Purchase Option on the El Chuin Copper Project
Prime Meridian Resources Corp. Executes LOI
for Purchase Option on the El Chuin Copper
Project
Vancouver, British Columbia--(Newsfile Corp. - December 5, 2022) -
Prime Meridian Resources
Corp.
(
TSXV: PMR
) ("
PMR
'' or the "
Company
") is pleased to announce that the Company has
executed two letters of intent dated November 26th (LOIs) for the option to purchase up to a 100-per-
cent interest in the 3,792-hectare El Chuin Copper Project (the "Project" or "El Chuin"), located in
Sonora, Mexico, 65 kilometres southeast of the La Caridad Copper Molybdenum Porphyry Deposit and
269 kilometres northeast of Hermosillo.
Brian Leeners, CEO of Prime Meridian, stated, "The El Chuin Copper Project is a rare opportunity to
add a potentially large copper porphyry target to our growing portfolio of copper projects in Sonora,
Mexico. We are very excited about El Chuin, where the work done to date has identified extensive
mineralization and hydrothermal alteration exhibiting a porphyry copper signature."
El Chuin Copper Project
The El Chuin Copper Project covers an interpreted porphyry copper target, encompassing historical
small-scale mine workings and widespread copper and iron mineralization in outcrops. High-grade
copper mineralization is best developed on the hydrothermal vein structures on the La Azurita,
Samaniego, and Loomis zones on the northern portions of the Property, while disseminated and
replacement-type copper mineralization also occurs, with some outcrops measuring more than 100
metres in diameter. Elevated gold, silver, molybdenum and tungsten values have been reported to occur
alongside copper mineralization.
(1)
Mineralization on the Property is zoned outwards, from copper-molybdenum-bearing contact skarns
proximal to the intrusion to distal lead-zinc-silver manto-type mineralization. The zonation of hydrothermal
alteration, in conjunction with that of mineralization, is typical of a porphyry system.
(1)
The nearest population centre is the town of Bacadéhuachi. The Project is readily accessible by paved
highway from Hermosillo to Bacadéhuachi with an 11-kilometre well-maintained gravel road leading to
the centre of the property.
Reconnaissance on the Project was carried out by Servicio Geológico Mexicano (SGM) in 1976. This
work was summarised in a 2012 report on the Property, identifying nine significant mineralized zones:
Samaniego, La Gloria, Nogales, Loomis, El Cantil, La Azurita, Breccia los Nogales, Los Tecolotes, and
Arroyo. Highlights of some significant zones are outlined below. See
Figure 1
.
Samaniego Zone
Mineralization in this zone consists of chalcopyrite-magnetite-specularite blebs along a NW trending fault
within an andesite flow. This style of mineralization outcrops over a 250 by 10 to 20-metre area. SGM
sampling of outcrops within this zone assayed 1.13% to 4.92% Cu, 122 to 548 ppm Zn, and 15 to 41.4
ppm Ag. See
Figures 2, 3, and 4
.*
(1)
La Gloria Zone
Mineralization at the La Gloria prospect exhibits contact metamorphism and mineralization consists of
chalcopyrite, magnetite, arsenopyrite, and pyrite. Mineralization occurs as pod-like masses and zones
along faults and fractures irregularly spaced within a 250 by 100 metre area of outcrop. Assay values
within this zone ranged from 0.08% to 2.68% Cu, 65 to 768 ppm Zn, and 11.5 to 40.6% Fe.*
(1)
Nogales Zone (aka La Gloria 2)
The Nogales prospect consists of a contact zone measuring 100 metres in length by 4 to 10 metres in
width hosting blebs, pockets, and cavity fillings of pyrite-galena-sphalerite mineralization. Trenching
identified continuous mineralization to at least three metres depth. Channel sampling of the structure
returned values of 0.86% to 1.86% Zn and 4 to 51 ppm Ag.*
(1)
Figure 1.
Geologic Section of the El Chuin Area (looking north)
To view an enhanced version of this graphic, please visit:
https://images.newsfilecorp.com/files/5386/146792_2d68cc3ec44fe963_001full.jpg
Figure 2.
Closeup view of outcrop at Samaniego zone
To view an enhanced version of this graphic, please visit:
https://images.newsfilecorp.com/files/5386/146792_2d68cc3ec44fe963_002full.jpg
Figure 3.
Closeup view of outcrop at Samaniego zone
To view an enhanced version of this graphic, please visit:
https://images.newsfilecorp.com/files/5386/146792_2d68cc3ec44fe963_003full.jpg
Figure 4.
10 by 20-metre mineralized outcrop at Samaniego zone
To view an enhanced version of this graphic, please visit:
https://images.newsfilecorp.com/files/5386/146792_2d68cc3ec44fe963_004full.jpg
* Cautionary Note:
The reader is cautioned that grab rock samples are selective by nature and may not represent the true grade or style of
mineralization across the Property.
Qualified person
The technical contents of this release were approved by Case Lewis, P.Geo., a qualified person as
defined by National Instrument 43-101.
References
1
.
Bond, J.R., 2012. "Preliminary report: El Chuin, El Chuin 2, Nino Luis, and La Gloria Concessions,
Bacadehuachi Sonora, Mexico".
Transaction Details
In order to exercise the first Purchase Option, PMR will make cash payments totalling US$230,000,
exploration expenditures of $2,225,000 and common share payments totalling 3,250,000 common
shares to the vendor (Quirina Vasquez Vargas - QVV) for a 100% ownership of the El Chuin and El
Chuin II concessions, over a 5-year term after the date of the execution of the Definitive Agreements, as
follows:
Anniversary
Exploration
Expenditures
Anniversary
Cash Payment
Prior to 5th
Anniversary
Common Shares
Year 1
$30,000
$
-
-
Year 2
$50,000
$
-
250,000
Year 3
$50,000
$
-
500,000
Year 4
$50,000
$
-
1,000,000
Year 5
$50,000
$
-
1,500,000
$230,000
$2,225,000
3,250,000
A
.
PMR will have the right at any time prior to the termination of the Purchase Option to offer a one-
time payment to QVV for 100% of the El Chuin and El Chuin II concessions.
B
.
The Exploration Expenditures will be made on the timing and at the discretion of PMR and must
total $2,250,000 by the end of the 5th year after the date of the execution of the Definitive
Agreements.
C
.
The Parties agree that QVV will retain a one percent (1%) Net Smelter Royalty ("NSR"), registered
with the Mining Ministry of Mexico. PMR, will have a right to buy back the NSR for US$1.5 million
and PMR, will also have a right of first refusal to buy back the NSR from QVV.
D
.
PMR will only be required to make the initial cash payment of $30,000 to QVV upon written
confirmation from PMR counsel in Mexico that the accrued Mining Taxes/Duties/Fees are paid,
and the concessions are in active status or are awaiting active status.
E
.
PMR will pay for all legal fees and accrued Mining Taxes/Duties/Fees to bring the concessions to
active status and maintain the concessions in active status during the term of the Purchase Option,
including all legal fees pertaining to all transactions in order to effect the Purchase Option, such as
but not limited to, legal fees to produce the Mexican Formal Agreement, fees to Register the
Formal Agreement in Mexico, transfer of title(s) fees, legal fees involved in the purchase of the
NSR by PMR, and all IVA taxes on all transactions to maintain the concessions in good standing
during the Purchase Option. These fees will be accounted for and included as Exploration
Expenditures, subject to copies of the invoices / receipts for these expenditures being provided to
QVV.
In order to exercise the second Purchase Option, PMR will make cash payments totalling
US$1,500,000, to the vendor (Victor Jose Valencia Sierra - VJVS) for a 100% ownership of the La
Gloria, La Gloria II, and Nino Luis concessions, before the five year anniversary date of the execution of
the Definitive Agreements, as follows:
Cash Payment
Date
LA GLORIA
$250,000
Prior to 5YR Anniversary
LA GLORIA II
$250,000
Prior to 5YR Anniversary
NINO LUIS
$1,000,000
Prior to 5YR Anniversary
$1,500,000
A
.
There are no required Exploration Expenditures or NSR for the La Gloria, La Gloria II, and Nino
Luis concessions.
B
.
PMR will only be required to make cash payments to VJVS upon written confirmation from PMR
counsel in Mexico that the accrued Mining Taxes/Duties/Fees are paid, and the concessions are in
active status or are awaiting active status.
C
.
PMR will pay for all legal fees and accrued Mining Taxes/Duties/Fees to bring the concessions to
active status and maintain the concessions in active status during the term of the Purchase Option,
including all legal fees pertaining to all transactions in order to effect the Purchase Option, such as
but not limited to, legal fees to produce the Mexican Formal Agreement, fees to Register the
Formal Agreement in Mexico, transfer of title(s) fees, and all IVA taxes on all transactions to
maintain the concessions in good standing during the Purchase Option.
The El Chuin concessions are currently not in good standing and PMR will be obliged to bring the
concessions to good standing. No payments to the vendors will be made prior to obtaining good
standing for the concessions.
The execution of the Definitive Agreements will be subject to the following conditions:
The satisfactory completion of due diligence by both parties.
Determination and quantification of the outstanding concession obligations.
Each Party obtaining all necessary and appropriate governmental, regulatory, contractual, board of
director, shareholder, member and other third-party licences, permits, approvals and/or consents
which are required to execute the Definitive Agreements.
Such other necessary and appropriate conditions as the parties shall mutually agree during their
negotiations of the Definitive Agreements.
About Prime Meridian Resources
Prime Meridian Resources is focused on the exploration and development to production of copper and
silver projects in Mexico.
On behalf of the Board of Directors of
Prime Meridian Resources Corp.
"Brian Leeners"
Brian Leeners, CEO & Director
/ +1 604-862-4184 (WhatsApp)
The TSX Venture Exchange has in no way passed upon the merits of the proposed transaction and
has neither approved or disapproved the contents of this press release.
To view the source version of this press release, please visit
https://www.newsfilecorp.com/release/146792