Evrim Resources Corp. said Feb. 20 that it signed a letter of intent with a unit of Coeur Mining Inc., allowing the latter to acquire up to an 80% stake in the Sarape epithermal gold-silver project in Sonora, Mexico.
To acquire the stake, Coeur will spend US$16.5 million on exploration, make staged cash payments of US$2.4 million and deliver a National Instrument 43-101-compliant feasibility study on the project based on a measured and indicated resource of at least 1 million ounces gold equivalent within 10 years.
Coeur is required to pay US$100,000 upon signing a definitive agreement and spend US$500,000 on exploration in the first year. After these milestones are met, it can earn an initial 51% stake by completing yearly earn-in commitments and a preliminary economic analysis based on an inferred resource of at least 1 million ounces of gold equivalent.
Coeur can acquire a further 39% interest by delivering a feasibility study. Upon securing an 80% stake, Coeur will continue to pay Evrim US$100,000 per year until mining and construction permits are received.
Evrim may opt to take part in the joint venture with a 20% stake once the permits are secured or convert its interest into a 3% net smelter royalty, of which one-third can be purchased for US$2.0 million.
If Coeur elects not to proceed to the second earn-in option, it will convert its 51% stake to a 2% NSR, of which half can be purchased by Evrim for US$2.0 million.
Evrim will serve as the project's operator up to the completion of the preliminary economic analysis.