Vortex Metals to Acquire up to an 80% Interest in Compelling Copper Project in Chile
Vortex Metals to Acquire up to an 80% Interest in Compelling
Copper Project in Chile
VANCOUVER, BC
,
June 27, 2023
/CNW/ - Vortex Metals Inc. (TSXV: VMS) (FSE: DM8) (OTCQB: VMSSF) ("Vortex" or the "Company") is
pleased to announce that it has entered into a non-binding Letter of Intent (LOI) for an option to acquire up to an 80% Interest in the Illapel
Copper Project, with SCM Ventana Minerals Group, a
Santiago, Chile
based mining Company. The parties have agreed to a 90-day exclusivity
period to negotiate the definitive agreement.
Illapel Copper Project Highlights:
Favorable Geology Extends north and south from the Mineralization at the Rio 27 Mine
Exploration Permits Obtained for Drilling and Exploration
High-Priority Drill-Ready Targets Identified
Access to Paved Roads, Power Grid and Water
8,000 Hectare Prospective Land Package
Adjacent to the Rio 27 Mine and Processing Plant
Year round drilling
Low Elevation- 1500 metres above sea level
"
I believe that the Illapel Project combined with our two Mexican copper-gold assets provides Vortex stakeholders with a rare
opportunity. Given the geological settings, all three projects possess the potential to be transformative", said Vortex Chairman and
Founder
Michael Williams
.
Project Overview
The Illapel Copper Gold project is located in the Commune of Illapel, Choapa Province of the Fourth Region of
Chile
and is 250 km north of
Santiago
. The nearest town is the mining centre of Illapel located 35 kilometres away. The project has excellent infrastructure connecting
paved roads, electricity, and mild climate favourable to year-round exploration. Illapel is fully permitted for exploration, and drilling may
potentially commence immediately following the execution of the definitive agreement.
The region surrounding Illapel has seen extensive mining activity, both past and present. Of particular note, the
El Espino
copper-gold (IOCG)
Project (Engineering feasibility complete; awaiting environmental permits. Source:
www.pucobre.cl
) is located approximately 14km to the north,
and is presently planned for development by Pucobre. Several small gold and copper mines also operate in the immediate área.
Rio 27 Mine
The Illapel Project is adjacent to an existing mining operation owned by Ventana Group and known as the Rio 27 mine. The Rio 27 mine has
been in production since 2010 with its near-site processing plant. Ventana has advised that to date, approximately 400,000 tonnes of
mineralized material with an average grade of 1.39% copper has been processed at site. The LOI provides a right of first refusal (ROFR) on
the Rio 27 Mine and processing facility.
Vikas Ranjan
, Chief Executive Officer and a Co-Founder of Vortex Metals, stated that Vortex Metals is thrilled to announce the
option to acquire a highly prospective exploration project, adjacent to
,
and extending from
,
an existing mining operation.
Chile
is the
largest copper producer in the world, accounting for approximately 28% of global copper production. In our view one of the best
ways to make a discovery is to explore by an existing mine. We believe that with the Illapel Copper property, we will acquire an
extremely prospective project that is drill
-
ready.
Diagram 1 (CNW Group/Vortex Metals)
Geolog
y and Mineralization
At Illapel, stratabound mineralization of copper (chalcocite and bornite) and silver is hosted in Jurassic and Lower Cretaceous continental
sedimentary and volcaniclastic rocks to the east of the Manquegua Fault. The Manquegua Fault is a regional feature separating the Farellon
Sanchez Intrusive formation to the west from the sandstone volcano-sedimentary formations to the east where the Rio 27 Mine
is located. Mineralization in the Río 27 Mine is cupro-argentiferous with primary chalcocite and bornite hosted in mantos, veins and
lesser breccias.
Diagram 2 (CNW Group/Vortex Metals)
Exploration
Mineralization at the Rio 27 mine is associated with NNE-trending structures and felsic dykes where they are intersected by WNW-trending
structures and ocoite (andesite porphyry) dykes. A vertical control is also present, with certain stratigraphic units being more favorable to
manto-style mineralization. The favorable geology extends immediately north and south from the mineralization at Rio 27, and comprises high-
priority targets that may be tested early in the program.
The favorable structure and dykes, with cross-cutting ocoite and associated copper oxides, are found at multiple locations within the project
area, and represent high-quality targets for exploration and drilling.
Finally, gold-bearing epithermal veins are found in the western portion of the project area, and represent additional targets for
exploration and drilling in and of themselves
.
Terms and Conditions of the Illapel Copper Deal
The transaction is subject to several conditions including the negotiation of a definitive agreement and the approval of the TSX Venture
Exchange. The parties have agreed to a 90-day exclusivity period to negotiate the definitive agreement. The material terms and conditions of
the non-binding LOI are as follows:
Stage 1 – 60% interest
Vortex will have the right to earn a 60% interest in the Illapel Project by making cash payments, issuing Vortex Shares, and incurring
exploration expenditures in accordance with the following schedule.
Deadline
Cash Payments (USD)
Vortex Shares
Issuance
Exploration
Expenditures
1
Five business
days following
the satisfaction
or waiver of all
conditions
precedent in
the Definitive
Agreement.
$200,000
n/a
n/a
No later than
twelve (12)
months after
the Effective
Date
$150,000
n/a
n/a
No later than
twenty-four (24)
months after
the Effective
Date
$200,000
3,000,000
2,000,000
No later than
thirty-six (36)
months after
the Effective
Date
$275,000
n/a
$1,000,000
No later than
forty-eight (48)
months after
the Effective
Date
$275,000
n/a
$2,000,000
No later than
sixty (60)
months after
the Effective
Date
n/a
5,000,000
$5,000,000
Completion of
Pre-Feasibility
Study in no
later than
seventy-two
(72) months
after the
Effective Date
n/a
15,000,000 shares
n/a
Vortex may extend the time to complete the pre-feasibility study by a further 12 months by increasing the cash portion of the First Option obligation by $200,000
Completion of
Pre-Feasibility
Study in no
later than
eighty-four (84)
months after
the Effective
Date
200,000
15,000,000
shares.
Totals
$1,100,000/$1,300,000
23,000,000
(
subject to
a 19.9%
cap
calculated
on the
issued and
outstanding
common
shares of
Vortex (the
"
Cap
"
)
$10,000,000
1
If Vortex spends USD 10,000,000 in exploration expenditure but decides not to exercise the stage one option, then the Definitive Agreement will terminate, additional 5,000,000 Vortex shares will be issued, and the ownership of the Project will remain with
Ventana. Vortex will then be granted a Net Smelter Royalty (NSR) of 1.5% on the entire project, encompassing all mining claims subject to this agreement with maximum amount recoverable through the NSR being capped at USD 10,000,000.
Stage Two – Additional 20% interest (80% total)
Following the exercise of the First Option, Ventana will grant Vortex an option to earn an additional 20% interest in the Project (the "
Second
Option
") by completing a feasibility study on the Project. The Second Option will be deemed to be validly exercised upon the completion of the
feasibility study on the Project as described above.
Once Vortex exercises the Second Option, it will arrange project financing for 100% of the project, including Ventana's share of 20% which will
be recovered from commercial production.
Ventana will also be granted a Net Smelter Royalty (NSR) of 2.5% on the entire project, encompassing all mining claims subject to this
agreement from the effective date of this agreement. Vortex will have a right to buy 0.5% of the NSR by paying
USD 1.75M
at any time from
the effective date of this agreement.
All Vortex Shares issuable pursuant to the Definitive Agreement will be subject to a 24-month contractual escrow from the date of issuance.
25% of the Vortex Shares will become free trading every 6 months following the date of issue. It is expected that Ventana will nominate one
person to the board of Vortex following the definitive agreement becoming effective.
Qualified Person / Quality Control and Quality Assurance
Dr.
John E. Larson
, Ph.D., is a qualified person ("QP") as defined by NI 43-101 and has reviewed and approved the technical content of this
press release.
About Vortex Metals Inc.
Vortex Metals Inc. is the parent company of Mexican subsidiary Empresa Minera Acagold, S.A. de C.V., which is the owner of a 100% interest
in two drill-ready high-potential copper volcanogenic massive sulfide (VMS) properties (Riqueza Marina and
Zaachila
) in the state of Oaxaca,
and a third high-potential gold property (El Rescate) in the state of Puebla. The Oaxaca projects incorporate the most highly prospective areas
of high-grade copper mineralized surface exposures ('gossans') and prominent gravity anomalies along an emerging copper VMS belt that
includes Minaurum Gold's (TSXV:MGG) Santa Marta project.
Forward-Looking Statements
This press release may contain forward looking statements that are made as of the date hereof and are based on current expectations,
forecasts and assumptions which involve risks and uncertainties associated with our business including permitting approvals, any private
placement financings, the uncertainty as to whether further exploration will result in the target(s) being delineated as a mineral resource, capital
expenditures, operating costs, mineral resources, recovery rates, grades and prices, estimated goals, expansion and growth of the business
and operations, plans and references to the Company's future successes with its business and the economic environment in which the business
operates. All such statements are made pursuant to the 'safe harbour' provisions of, and are intended to be forward-looking statements under,
applicable Canadian securities legislation. Any statements contained herein that are statements of historical facts may be deemed to be
forward-looking statements. By their nature, forward-looking statements require us to make assumptions and are subject to inherent risks and
uncertainties. We caution readers of this news release not to place undue reliance on our forward-looking statements as several factors could
cause actual results or conditions to differ materially from current expectations. Please refer to the risks set forth in the Company's most recent
annual MD&A and the Company's continuous disclosure documents that can be found on SEDAR at
www.sedar.com
. The Company does not
intend, and disclaims any obligation, except as required by law, to update or revise any forward-looking statements whether as a result of new
information, future events or otherwise.
The Company cautions that mineralization on, or production from, neighbouring properties is no guarantee of the existence of similar
mineralization or a guarantee of future production from the Illapel Project.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this release.
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For further information:
Vikas Ranjan, Chief Executive Officer and Director, Email: [email protected], Phone: 416-605-7024
CO: Vortex Metals
CNW 07:00e 27-JUN-23