Auryn Resources Inc. said Dec. 19 that it has optioned three mineral concessions from Corporacion Aceros Arequipa SA located within the former's Sombrero copper-gold project located in Southern Peru.
The company's unit Sombrero Minerales SAC will initially option the three concessions from Aceros through mining assignment and lease agreements.
If the option is exercised, the companies will form an 80/20 joint venture combining the 520-hectare Aceros concessions with 4,600 hectares of Auryn's 120,000-hectare Sombrero land position.
The company is required to commit US$5.2 million for work commitments within the Aceros concessions and pay US$800,000 cash within four years.
Sombrero Minerales will then hire an independent engineer to complete two preliminary economic scoping studies over two years to study existing magnetite deposits and any identified non-ferrous mineralization.
The formation of the joint venture is conditional on the subsidiary exercising existing options with Alturas Minerals Corp. to secure a 100% interest in the underlying Sombrero concessions.
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.