The 1,500 meter drill program is scheduled to commence on March 19th,, 2007 and should be completed in May 2007. The program will be comprised of 6 holes that will test for gold and silver targeted deposits at 100 to 200 meters below the surface.
Alain Vachon, exploration manager, stated, "We are quite anxious to drill the first holes into this mineralized system as no drilling has ever been done on the property. The property is in close proximity to existing mining operations. The objective of the program is to find the boiling zone which has the potential for deposits of gold and silver."
The Santos project is comprised of 12 mining concessions totalling 9,300 hectares located in the Department of Ayacucho, which is 400 km SSE of the city of Lima and 60 km NE of the city of Nasca.
Under the terms of the AGA, Paramount and/or its subsidiaries must incur minimum expenditures of US$3,000,000 on the properties over 3 years, with US$1,000,000 in expenditures (including a minimum of 3,000 metres of drilling on 3 properties) per year. In addition, Paramount must issue Teck Cominco 50,000 units a year over the three years. Each unit will include a common share and a 2 year stock purchase warrant that shall be priced at a 30% premium to the 20 day trading average prior to issue.
Upon Paramount vesting in the AGA, CMP may earn a 100% interest in the Santos Property, subject to a retained 2% NSR Royalty and back-in right (as outlined below) to Teck Cominco, by incurring an aggregate expenditure of US$250,000 (including a US$50,000 minimum annual commitment) with respect to Santos.
Teck Cominco may exercise its back-in right on the Santos property at any time up to 60 days after CMP delivers notice that CMP has spent US$3,000,000 on Santos. Teck Cominco may earn a 60% interest by incurring 2 times the expenditures incurred by CMP to a maximum requirement of US$6,000,000. Upon earning back a 60% interest, Teck Cominco shall extinguish the retained NSR Royalty and may elect to earn an additional 10% interest by completing, at its sole cost, a feasibility study on Santos. -- www.cnxmarketlink.com
Posted March 16th, 2007 by ruzik_tuzik
