(Vortex Metals, 20.Nov.2023) — Vortex Metals Inc. (TSXV: VMS) (FSE: DM8) (OTCQB: VMSSF) signed the definitive agreement with “Windows Minerals SCM and SLM Rio 27 De Farellon Sánchez” (Jointly the optionors) for an option to acquire up to an 80% Interest in the Illapel Copper Project. This follows the letter of Intent (LOI) that was entered into on 27 Jun. 2023, with SCM Ventana Minerals Group, a Santiago, Chile based mining company, as referenced by the press release issued on 27 Jun..
Illapel Copper Project Highlights:
- Favorable Geology Extends north and south from the Rio 27 Mine,
- Exploration Permits Obtained for Drilling and Exploration
- Access to Paved Roads, Power Grid and Water
- 8,000 Hectare Prospective Land Package
- Year round drilling
- Low Elevation- 1500 metres above sea level
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 25 kilometres away. Drilling may potentially commence after all regulatory approvals, including the approval from Toronto Venture Stock Exchange (TSXV) have been received.
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 final 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.
Exploration Overview
Stratabound copper and silver 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. Mineralized structures are hosted within a variable sequence of volcaniclastic rocks, and 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 has also been identified in outcrop at multiple locations throughout the concession area with associated copper oxides.
In addition to the copper-silver mineralization, Vortex has identified several epithermal veins in the western portion of the project area that are similar geologically to gold-copper mineralization in the Farellon Sanchez district immediately to the west.
Given the above, once all regulatory approvals, including the approval from the TSXV are obtained, Vortex is in the process of designing a systematic program of geology and drill-testing that will:
- Test high-priority, drill-ready targets immediately to the north and south along strike from the Rio 27 mine;
- Map, sample and test drill-targets associated with the epithermal veins in the western portion of the concession area, and;
- Begin mapping and sampling of the favorable structures and dykes, with cross-cutting ocoite and associated copper oxides, that are found at multiple locations within the project area.
The above program will allow Vortex to rapidly test high-priority, drill-ready targets while concurrently advancing the regional geologic work to generate additional targets for drilling.
Vikas Ranjan, Chief Executive Officer and a Co-Founder of Vortex Metals, stated “we are very excited to conclude the Definitive Agreement and begin exploration work. Illapel is a drill-ready project that extends from, an existing copper mine. Opportunities like this are extremely rare and we look forward to drilling.”
Terms and Conditions
The Optionors are the beneficial and legal owners of an undivided one hundred percent (100%) interest in the Illapel Property that includes portions of Rio 27 Concessions that also host the Rio 27 Mine.
Optionors have agreed to grant an exclusive option to Vortex to acquire a sixty percent (60%) interest in, and to, the Property (the “First Option”); and If the First Option is exercised in full, the Optionors have agreed to grant an exclusive option to Vortex to acquire a further twenty percent (20%) interest, for a total of 80% in the entity that will be incorporated upon exercise of the First Option subject to the terms set forth herein (the “Second Option”. Such terms are described later in this press release under the heading Terms and Conditions of the Illapel Copper Deal.
The Option will also include parts of Rio 27 Concessions that host the Rio 27 Mine, an existing mining operation owned by SLM Rio 27 De Farellon Sánchez . The Rio 27 mine has been in production since 2010 with its near-site processing plant. Farellon Sánchez 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 option agreement provides a right of first refusal (ROFR) on the Rio 27 Mine and processing facility.
Co-founder and Executive Chairman, Michael Williams commented that “with Illapel property option now in our property stable alongside our two Mexican projects Riqueza Marina and Zaachila, we believe that we provide our shareholders with three excellent opportunities to potentially make a discovery that could dramatically impact Vortex Metal.”
The transaction is subject to several conditions including the approval of the TSX Venture Exchange. The material terms and conditions of the definitive agreement are as follows:
Grant of First Option
Vortex may exercise the First Option by satisfying all of the following conditions (collectively, the “First Option Conditions of Exercise”):
making cash payments to Windows Minerals in the following amounts and dates:
$200,000 on the date which is five (5) Business Days following the Closing Date;
$150,000 no later than twelve (12) months from the Closing Date;
$200,000 no later than twenty-four (24) months from the Closing Date;
$275,000 no later than thirty-six (36) months from the Closing Date;
$275,000 no later than forty-eight (48) months from the Closing Date; and
completing Share issuances to Windows Minerals in the following amounts and dates:
3,000,000 no later than the earlier of: (A) date that is twenty-four (24) months from the Closing Date; and (B) the date on which the company sells all, or substantially all, of its operations in Mexico;
5,000,000 no later that the date that is sixty (60) months from the Closing Date; and
15,000,000 no later than the date that is seventy-two (72) months from the Closing Date.
making cash payments to SLM Rio in monthly installments of $4,500 starting six (6) months from the Closing Date, with a cap of $226,000, corresponding to Vortex’s contribution to settle an ENAMI Debt.
incurring Exploration Expenditures on the Property in the following amounts and dates:
$2,000,000 by the date which is twenty-four (24) months from the Closing Date; and
an additional $1,000,000 by the date that is thirty-six (36) months from the Closing Date;
an additional $2,000,000 by the date that is forty-eight (48) months from the Closing Date; and
an additional $5,000,000 by the date that is sixty (60) months from the Closing Date.
completing a Pre-Feasibility Study on the Property no later than the date that is seventy-two (72) months from the Closing Date. Notwithstanding the forgoing, Vortex may extend the time to complete the Pre-Feasibility Study referenced in this Section 5.1(d) to the date which is no later than the date which is eighty-four (84) months from the Closing Date by paying $200,000 in cash to the Optionor at the end of year five or sixty (60) months from the effective date of this agreement.
Vortex may, at its sole and absolute discretion, accelerate the funding with respect to the Exploration Expenditures set forth in Section 5.1(d) above. If Vortex incurs in Exploration Expenditures in an amount greater than required be an applicable date in 5.1(d), then such excess shall be credited toward the next Exploration Expenditure requirement.
If Vortex incurs in excess of $10,000,000 in Exploration Expenditures on the Property prior to the date that is sixty (60) months from the Closing Date, but ultimately does not exercise the First Option, Windows Minerals will grant Vortex the Expenditure Return Royalty on its Property and a mortgage and prohibition to transfer the Property in favor of Vortex to secure payment of the Expenditure Return Royalty. Such mortgage and prohibition shall be postponed to those securities required by financing institutions to fund the development of a mining project over the Property. The Expenditure Return Royalty will have a cap on royalty payments equal to the amount of Exploration Expenditures incurred by Vortex on Windows Minerals’ Property.
All Vortex Shares issuable pursuant to the Definitive Agreement will be subject to a 12-month contractual escrow from the date of issuance. It is expected that Ventana will nominate one person to the board of Vortex following the definitive agreement becoming effective upon receiving all regulatory approvals, including the approval of Toronto Venture Stock Exchange (TSXV).
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.
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