Aethon Minerals Corp. secured an exclusive right to reach an option deal over AbraPlata Resource Corp.'s Diablillos silver-gold project in Argentina.
Under the terms, Aethon must pay US$50,000 to have the exclusive right to complete its due diligence and finalize an option deal for a stake of at least 50% by July 26. The company is also required to spend at least US$150,000 on the project by June 28.
Upon the exercise of the option, Aethon must issue 9.9% of its shares and subscribe to 9.9% of AbraPlata's shares via a private placement.
According to a March 1 release, SSR Mining Inc., the original vendor of the project to AbraPlata, agreed to not enforce payment of an outstanding net smelter royalty until Oct. 31. It would also consider delaying property payments of US$5 million and US$7 million by up to four years under certain circumstances, including a potential merger of Aethon and AbraPlata.
As part of its initial exploration program, Aethon said it will review the project's drill data and epithermal-style gold resources in the area.
A March 2018 preliminary economic assessment for Diablillos estimated a posttax net present value, at a 7.5% discount, of US$197 million, with a 30.2% internal rate of return over a 3.1-year payback period.