Mundoro Capital Inc. announces it has entered into an earn-in agreement (“Agreement”) with Vale Canada Limited (“Vale”), in which Mundoro has granted to Vale an option to earn-in to four of Mundoro’s exploration licenses: Sumrakovac, Osnic, Dubrava and Padina (the “Vale-Mundoro Projects”) located within the Timok Magmatic Complex (“Timok”) in Serbia. Timok is one of the most prolific metallogenic domains in the Tethyan Belt. Timok hosts the Cukaru-Peki deposit and the producing mines: the Bor copper porphyry underground mine and the Veliki Krivelj copper-gold porphyry open-pit mine (“Bor Mine Complex”) (see Figure 1: Location Map).
Teo Dechev, CEO and President of Mundoro commented, “Mundoro is pleased to welcome Vale as our latest partner in Serbia, which reflects the prospectivity of Mundoro’s land package within the Timok region and demonstrates the growing interest in this region.”
Pursuant to the Agreement, Mundoro has granted to Vale an option to earn, over two primary phases, up to a 75% interest in the Vale-Mundoro Projects by sole funding expenditures of up to US$45 million (C$60 million) as follows:
Vale has the right to earn a 51% interest in the Vale-Mundoro Projects by sole-funding US$5 million (C$7 million) in expenditures over 3 years from satisfaction of the due diligence condition (“Phase One”).
Mundoro will be the operator of the Vale-Mundoro Projects in Phase One.
Following Phase One, Vale has the right, exercisable within 60 days, to elect to enter Phase Two, whereupon it can earn an additional 24% interest in the Vale-Mundoro Projects, for a total 75% interest, by sole-funding an additional US$40 million (C$53 million) in expenditures (the “Phase Two Option”) by the fifth anniversary of the election date.
If Vale (a) elects not to enter Phase Two, or (b) does not satisfy the Phase Two Option, then Vale will pay to Mundoro an annual fee of US$150,000 (C$198,550) (“Annual Payment”). Annual Payments cease upon commencement of commercial production. All Annual Payments will be credited against future payment obligations under the NSR.
The parties have agreed to establish a new Serbian corporation as the legal vehicle representing the earn-in/joint venture and to hold the relevant licenses and permits; the earn-in period will commence once all relevant organizational matters and transfers relating to the new corporation have been completed. On completing the Phase Two, Vale will have a right, exercisable for a period of 60 days, to purchase an additional 5% interest in the Vale-Mundoro Projects from Mundoro, for a total of 80% interest. The purchase price for the 5% interest will be based on a calculation of the fair market value as determined by an independent appraisal.
If Mundoro’s interest in the joint venture is reduced below 10% through dilution, Mundoro’s interest will be converted to a 2% Net Smelter Returns Royalty (“NSR”) subject to Vale’s right to reduce the NSR to a 1% NSR by making a fixed price payment to Mundoro.
Overview of Sumrakovac
Sumrakovac license is 106 sq.km area located 5 km southwest of the Bor Mine Complex and 4 km west of the Cukaru-Peki high sulphidation Cu-Au deposit and hosts porphyry copper-gold style mineralisation. Main target is the Skorusa hydrothermal system, 4.5 km by 2 km of pervasive argillic-phyllic alteration hosting two porphyry centers Skorusa West and Skorusa East. Skorusa West target hosts a zone with potassic alteration and associated Quartz-stockwork mineralisation at surface, extending NE-SW for about 200 m along strike. Surface rock sampling of the Quartz-stockwork returned 23m @ 0.72 g/t Au and 0.17% Cu.
Work completed to date at Sumrakovac includes geological mapping, soil and rock sampling and geophysical surveys. Mundoro drill programs include 9 diamond drill holes totalling 2896m and 6 reverse circulation (RC) holes totalling 609m drilled within the Skorusa hydrothermal system 4.5km by 2km and aimed to test various targets. The drilling confirmed the existence of a large porphyry related alteration system with at least two mineralized centers (Skorusa West and Skorusa East). Drilling at Skorusa West successfully confirmed gold-copper mineralisation related to stockwork veining as part of a multiphase porphyry system. The mineralisation remains open laterally and vertically down plunge to the WNW. Some of the significant results are:
63.4m @ 0.30 g/t Au and 0.11% Cu from 71.6m; drill hole SUMDD001
60.0m @ 0.30 g/t Au and 0.14% Cu from 54.0m; drill hole SUMDD002
36.0m @ 0.21 g/t Au and 0.19% Cu from 289m; drill hole STDD002, collared 270m SW of SUMDD001
At Skorusa East all drill holes intersected hydrothermally altered andesite volcanics interpreted to be part of a larger footprint of a porphyry system. Trace disseminated chalcopyrite and quartz-chalcopyrite-pyrite B-veins were encountered throughout the STRD005 drillhole suggesting existence of a different mineralized center to the east. Quartz-magnetite stockwork-like veinlets and D-type porphyry sulphide veins were also identified and remain untested.
Adding to the prospectivity of the Sumrakovac license, completed regional exploration and historical data compilation has identified an additional trend of mineral occurrences and hydrothermal alteration located ~ 3 km east of the Skorusa system and ~7 km west of the Cukaru Peki discovery. This area has had very little exploration in the past, shares the same geology and structural setting and offers further exploration potential within the Sumrakovac license.
Overview of Osnic
Osnic license totals 76 sq.km and is located directly east of the Savinac license and south-east of Sumrakovac license. The Osnic license covers an area of structural complexity – intersection of major structures recognised in Timok Belt and has potential for undercover epithermal and porphyry Cu-Au mineralisations.
Completed exploration work at Osnic includes geological mapping, limited geochemical sampling (stream, soil and rock), ground magnetic survey and scout drilling of three RC holes totalling 501 m and one diamond drill hole totaling 251.2m.
Northern part of the license is highlighted by copper-in-soil anomaly from a regional 1km x 1km grid survey. Drill hole 18-OSN-01 intersected disseminated native copper and chalcocite mineralisation in clasts indicative for nearby mineralised source.