Canadian Silver Hunter Inc. entered into a binding option deal with Cobalt Projects International Corp., pursuant to which the latter may earn up to a 100% interest in the company's flagship South Lorrain silver project in Ontario.
Under the terms, Cobalt Projects International can exercise the first option to earn a 50% interest by paying an aggregate C$850,000 and incur expenditures totaling approximately C$1.8 million over a three-year period.
Cobalt Projects International may exercise the second option to secure an additional 1% interest by paying an aggregate C$200,000 within 60 days of exercising the first option and producing a NI 43-101 report by the fourth year of the option deal.
Additionally, the company can earn the remaining 49% interest by paying an aggregate C$750,000 and incurring expenditures totaling C$1.3 million by the fifth year of the agreement.
Following the exercise of the first and second options, if Cobalt Projects International opts to not exercise the third option, the companies will form a joint venture for the development and mining of any commercially exploitable ore body on the property.
Once Cobalt Projects International exercises all three options and secures full interest in the project, it will grant a 2% net smelter return royalty to Canadian Silver Hunter, half of which can be repurchased for C$1.0 million at any time in the first 10 years.