Auryn Options Key Concessions at Sombrero
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Auryn Options Key Concessions at Sombrero
Vancouver, British Columbia – December 1 9, 2018 – Auryn Resources Inc. (TSX: AUG, NYSE
AMERICAN: AUG, “Auryn” or the “Company”) is pleased to announce that it has entered into a series
of agreements with Corporacion Aceros Arequipa S.A. (“Aceros”) to option 80% of three important mineral
concessions located within the Company’s Sombrero project located in Southern Peru.
The option takes the form of a mining assignment agreement combined with a framework a greement,
trust agreement, shareholders’ agreement and a corporate guarantee (the “Option” or the “Agreements”).
In the event that the Option is exercised, an 80% (Auyrn) : 20% (Aceros) joint venture would be formed
combining the 520 hectare Aceros concessions plus 4,600 hectares of Auryn’s 120,000 hectare
Sombrero land position (Figure 1). The Aceros concessions are considered important to create a
cohesive land position over key target areas as Auryn’s technical team advances the Sombrero Main
area towards its initial drill program in 2019.
A Message from Ivan Bebek, Executive Chairman & Director:
“We are pleased to welcome Aceros Arequipa’s involvement in our Sombrero Main project. Not only will
these concessions help us to further consolidate the district into a comprehensive land package, their
knowledge of the project and relationships with the local communities will be great assets as we move
forward.
“Sombrero is becoming one of the most impressive projects that we are aware of, with several discovery
opportunities. The abundance of mineralization sampled on surface , coincident with large chargeability
and magnetic targets, as well as the grades of both copper and gold mineralization are remarkable.
“We are well underway with the permitting process and are looking forward to a maiden drill program,
which we anticipate in Q2 of 2019.”
About the Aceros Concessions:
The Aceros Concessions are comprised of two distinct blocks. El Fierrazo RV (200 hectares) is located
on the eastern edge of Sombrero Main and Aceros HS 1 and Aceros HS 2 (320 hectares) are located on
the northern edge of Sombrero Main (Figure 1). These concession s are characterized by localized
magnetite bodies identified from surface and through magnetics.
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Figure 1:
Terms of the Agreements:
Under the terms of certain definitive agreements with Aceros, Auryn, through it s wholly owned Peruvian
subsidiary, Sombrero Minerales SAC (“SomMin”), will initially option the three concessions from Aceros
through mining assignment and lease agreements using an internationally recognized bank trustee.
Under these agreements, SomMin ha s a right to form an 80:20 corporate joint venture after completing
a series of cash payments, work commitments and technical studies , which confirm certain minimum
relative values of the two concession groups as detailed below.
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Option Terms:
Due Date Cash Payment made to Aceros
(US$)
Work Commitments within the
Aceros Concessions
Upon execution of Definitive
Agreement
$140,000 -
Within 12 months from Definitive
Agreement
$60,000 $ 150,000
Within 24 months from Definitive
Agreement $ 250,000 $ 500,000
Within 36 months from Definitive
Agreement $ 350,000 $ 1,500,000
Within 48 months from Definitive
Agreement - $ 3,000,000
Total $ 800,000 $ 5,150,000
If the Option is exercised , SomMin will hire an independent engineer to complete two preliminary
economic scoping studies (PEAs) over a period of two years. These PEAs will be a study of the existing
magnetite deposits and of any identified non -ferrous (including Cu, Au, Ag, Mo) mineralization,
respectively. If it can be shown that the net present value (NPV) of any non-ferrous deposit located within
Sombrero Main or the Aceros Concession s is greater than five times the NPV of the existing magnetite
deposits within the Aceros Concessions then the Option is consider ed fulfilled and an 80:20
(SomMin:Aceros) corporate joint venture will be established using a newly -formed, jointly-owned
Peruvian corporation.
In the event So mMin is unable to show that the net present value (NPV) of any non -ferrous deposit is
greater than five times the NPV of the existing magnetite deposits, then it can attain an extension of up
to three years if an NPV of at least $100 million was shown and SomM in must pay Aceros an additional
$2 million for each year of extension.
Once the joint venture is established, it will be governed by a customary shareholders’ agreement with
specific provisions allowing for the dilution of non -contributing parties and drag -along and first refusal
rights.
Formation of the joint venture also requires that SomMin first exercise its existing option rights with Alturas
Minerales SAC to acquire a 100% interest in the underlying Sombrero concessions. No securities of
Auryn are involved in the transaction but Auryn will provide a customary parent company guarantee of
SomMin’s obligations to Aceros.
ON BEHALF OF THE BOARD OF DIRECTORS OF AURYN RESOURCES INC.
Ivan Bebek
Executive Chairman
For further information on Auryn Resources Inc., please go to www.aurynresources.com or contact Natasha Frakes, Manager
of Corporate Communications at (778) 729-0600 or [email protected].
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About Auryn
Auryn Resources is a technologically driven junior mining exploration company focused on delivering shareholder value through
acquisition and development of premier gold projects . The Company’s management team is highly experienced with an
impressive track record of success. It has assembled an extensive technical team as well as a quality gold exploration portfolio.
Auryn is currently focused on scalable high-grade gold deposits in established mining jurisdictions, which include the Committee
Bay and Gibson MacQuoid gold projects located in Nunavut, the Homestake Ridge gold project in British Columbia and a portfolio
of gold projects in southern Peru, through Corisur Peru SAC.
About the Sombrero Project
This project consists of the North Sombrero and South Sombrero properties, comprising approximately 100,000 mineral claims
owned or optioned by Auryn Resources. The copper-gold Sombrero mining concessions are located 340 kilometers SE of Lima
in southern Peru and are hosted in the Andahuaylas-Yauri belt. This belt is interpreted to be on the north -western margins of
this Eocene -Oligocene aged copper -gold porphyry and skarn belt that hosts the Las Bambas, Haquira, Los Chancas,
Cotambambas, Constancia, Antapaccay and Tintaya deposits. The project is characterized by a strong structural control and
significant copper and gold values fro m historical surface samples. The principal targets at Sombrero are copper -gold skarn
and porphyry systems and precious metal epithermal deposits.
Forward Looking Information and Additional Cautionary Language
This release includes certain statements that may be deemed “forward -looking statements”. Forward -looking information is
information that includes implied future performance and/or forecast information including information relating to or associa ted
with the acquisition and title to mineral concession s. These statements involve known and unknown risks, uncertainties and
other factors which may cause actual results, performance or achievements of the Company to be materially different (either
positively or negatively) from any future results, performanc e or achievements expressed or implied by such forward -looking
statements. Readers should refer to the risks discussed in the Company’s Annual Information Form and MD&A for the year
ended December 31, 2017 and subsequent continuous disclosure filings with the Canadian Securities Administrators available
at www.sedar.com and the Company’s registration statement on Form 40-F filed with the United States Securities and Exchange
Commission and available at www.sec.gov.
No stock exchange or securities regulatory authority has reviewed or accepts any responsibility for the adequacy or accuracy
of this release.