Chakana Acquires 1.0% NSR Royalty ON Soledad Project, PERU
NEWS RELEASE
CHAKANA ACQUIRES 1.0% NSR ROYALTY ON SOLEDAD PROJECT, PERU
• Chakana acquiring 1.0% NSR royalty at a significant discount to existing purchase option agreement.
• Condor’s future NSR is reduced from 2.0% to 1.0%.
• Chakana has right to buy-down an additional 0.5% NSR royalty if purchase option agreement is exercised.
• Chakana pre-royalty payments are eliminated if purchase option agreement is exercised.
Vancouver, B.C., March 19, 2019 – Chakana Copper Co rp. (TSX-V: PERU; OTC:
CHKKF; FWB: 1ZX) (the “ Company ” or “ Chakana ”), announces that it has purchased a 1.0%
Net Smelter Returns (NSR) royalty (the “Royalty”) o n the Soledad project from Minera Vertiente
Del Sol S.A.C, the registered owner of the Soledad Property and a subsidiary of Condor
Resources Inc. The Royalty is independent of the Co mpany’s 100% option agreement with
Condor (see Condor news release dated April 25, 201 7). Exploration by Chakana has highlighted
the property’s gold, copper and silver potential, a nd the royalty acquisition is in anticipation of
continuing success, simplifying the royalty structu re and unburdening the Company’s ultimate
financial obligations.
The purchase price for the Royalty is US$565,000 co mprised of US$275,000 in cash and 900,000
Chakana shares. The Royalty covers Condor’s mining concessions and a 2-kilometer area of
interest.
Chakana previously had the right to re-purchase 50% of the 2% NSR royalty (or a 1% NSR) that
would be granted to Condor (the “Condor NSR”) for U S$2,000,000 if Chakana exercises its
option to purchase Condor’s Soledad concessions. As a result of Chakana purchasing the Royalty
now, the option agreement between the parties will be amended to reflect a reduction of the
Condor NSR royalty from 2% to 1%, with Chakana havi ng the right to re-purchase 50% of the
Condor NSR royalty (or 0.5% NSR) for US$1,000,000 s ubsequent to exercising the option
agreement. If Chakana does not exercise the option agreement to acquire Condor’s Soledad
concessions, Condor has the right to purchase 50% o f the Royalty (or 0.5% NSR) for
US$1,000,000. The amendment to the option agreement also eliminates Chakana’s pre-royalty
payment obligations. Chakana’s purchase of the Roya lty is subject to TSX Venture Exchange
approval.
“The purchase of a 1% NSR royalty on a large portio n of the Soledad project where twelve of
seventeen confirmed breccia pipes occur captures si gnificant value for Chakana shareholders at a
70% discount to the original option agreement. Purc hasing the Royalty also increases Chakana’s
flexibility to raise future capital and reduces a f inancial burden on the project that should enhance
the project economics if mineral resources are defi ned. The Royalty purchase affirms our
confidence in the Soledad project based on the init ial drilling of four breccia pipes and the
extensive surface sampling and geophysical work com pleted to date,” stated President and CEO
David Kelley.
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About the Soledad Project
The Soledad project is located in the Ancash Provin ce of central Peru, 35 kilometers south of
Barrick’s Pierina mine. The project has been subjec t to an aggressive exploration program by
Chakana since an initial 100% purchase option agree ment was established with Condor in April,
2017. Two subsequent agreements expanded the land p osition to 3,085 hectares (see news
releases dated May 23, 2018 and July 16, 2018 on ww w.sedar.com). The focus of exploration has
been on high grade copper-gold-silver mineralized t ourmaline breccia pipes that crop out at
surface. A total of 25,211m of diamond drilling has been completed to date on four of the
seventeen known breccia pipes. Over sixty targets have been defined on the property that have yet
to be tested. A 20,000m drill program planned for 2 019 will commence immediately upon
approval of drill permits.
Some highlights of previously released drill intercepts from Bx 1, Bx 5, and Bx 6 are:
* Reported mineralized intervals are not true widths given the vertical nature of the breccia pipe and the steep inclination of the holes. Cu_eq and
Au_eq values were calculated using copper, gold, and silver. Metal prices utilized for the calculations are Cu – US$2.90/lb, Au – US$1,300/oz,
and Ag – US$17/oz. No adjustments were made for rec overy as the project is an early stage exploration project and metallurgical data to allow for
estimation of recoveries are not yet available. The formulas utilized to calculate equivalent values are Cu_eq (%) = Cu% + (Au g/t * 0.6556) + (Ag
g/t * 0.00857) and Au_eq (g/t) = Au g/t + (Cu% * 1.5296) + (Ag g/t * 0.01307).
Sampling and Analytical Procedures
Chakana follows rigorous sampling and analytical pr otocols that meet or exceed industry
standards. Core samples are stored in a secured are a until transport in batches to the ALS facility
in Callao, Lima, Peru. Sample batches include cert ified reference materials, blank, and duplicate
samples that are then processed under the control o f ALS. All samples are analyzed using the
ME-MS41 (ICP technique that provides a comprehensiv e multi-element overview of the rock
geochemistry), while gold is analyzed by AA24 and G RA22 when values exceed 10 g/t. Over
limit silver, copper, lead and zinc are analyzed us ing the OG-46 procedure. Soil samples are
analyzed by 4-acid (ME-MS61) and for gold by Fire Assay on a 30g sample (Au-ICP21).
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Qualified Person
David Kelley, an officer and a director of Chakana, and a Qualified Person as defined by NI 43-
101, reviewed and approved the technical information in this news release.
ON BEHALF OF THE BOARD
(signed) “ David Kelley ”
David Kelley
President and CEO
For further information contact:
Michelle Borromeo, Manager – Corporate Communicatio ns
Phone: 604-715-6845
Email: [email protected]
Neither TSX Venture Exchange nor its Regulation Ser vices Provider (as that term is defined in the policies of the
Exchange) accepts responsibility for the adequacy o r accuracy of this release.
Forward-looking Statement Advisory: This release ma y contain forward-looking statements. Forward-
looking statements involve known and unknown risks, uncertainties, and other factors which may cause
the actual results, performance, or achievements of Chakana to be materially different from any future
results, performance, or achievements expressed or implied by the forward-looking statements. Forward
looking statements or information relates to, among other things, the interpretation of the nature of the
mineralization at the Soledad copper-gold-silver project (the “Project”), the potential to expand th e
mineralization, and to develop and grow a resource within the Project, the planning for further explor ation
work, the ability to de-risk the potential explorat ion targets, and our belief in the potential
for mineralization within unexplored parts of the P roject. These forward-looking statements are based on
management’s current expectations and beliefs but g iven the uncertainties, assumptions and risks,
readers are cautioned not to place undue reliance o n such forward- looking statements or information. The
Company disclaims any obligation to update, or to p ublicly announce, any such statements, events or
developments except as required by law.
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Figure 1 – Map showing land position, known breccia pipes and altered areas interpreted as blind breccia pipes on the
Soledad project. The Royalty applies to the Condor concessions (blue) and a 2 km area of interest. The Royalty does
not affect the portion of the Barrick claim within the 2 km area of interest if Barrick exercises their back-in rights (see
Chakana news release dated July 16, 2018 at www.sedar.com).