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Western Pacific to acquire two high-grade gold exploration assets, Coriorcco and Las Antas, in southern Peru for cash consideration of USD $1,500,000 and 7,050,000 shares of Western Pacific
The 56-hectare Coriorcco Dome structure is a high priority exploration target with 17 mineralized epithermal veins. Veining may represent the upper-reaches of a low sulphidation epithermal system with precious metal grades improving with depth
Historic targeted underground mining at Coriorcco from 2 of 17 known outcropping veins produced over 5,720 tonnes of material, averaging 7.45 g/t Au
Highlights of limited surface rock sampling by the previous operators include:
Average grade from surface sampling 1.91 g/t Au over 181 sample
Further encouraging sampling for underground workings to be verified
Appoints mining entrepreneur Paul Matysek as Lead Advisor. Mr. Matysek is a consistent creator of shareholder value and has sold five publicly listed exploration and development companies, in aggregate worth over $2 billion
Western Pacific arranges private placement of 15,243,902 common shares at $0.41 per Share for gross proceeds of $6,250,000
Changes name to Oro X Mining Corp.
VANCOUVER, BC, Aug. 24, 2020 /CNW/ - WESTERN PACIFIC RESOURCES CORP. (TSXV: WRP)(the "Company" or "Western Pacific") is pleased to announce it has entered into an Option Acquisition Agreement (the "Option Acquisition Agreement") with Titan Minerals Ltd. ("Titan") (among others) in which Western Pacific will purchase Titan's right to acquire the Coriorcco and Las Antas gold projects located in Ayacucho, Peru. Upon closing of the transaction and Exchange acceptance, the Company will appoint Mr. Paul Matysek as lead advisor and change its name to "Oro X Mining Corp".
The flagship Coriorcco project is comprised of two concessions totalling 2,000 Ha and fully encloses the high priority Coriorcco Dome Structure. The Dome hosts 17 epithermal quartz, quartz-carbonate, and quartz-carbonate-adularia veins with Veins 3 and 6 being the most significant. These veins may represent the upper reaches of a low-sulphidation epithermal system.
The outcropping quartz vein system is host to drill-ready targets located within an extensive belt of volcanic hydrothermal systems. With favourable topography, access, and proximity to electrical power, the project is well suited for low capex development of high-grade, low-tonnage mining of veins.
"The acquisition of the Coriorcco and Las Antas options along with our proposed re-brand as Oro X Mining speaks to the strength of our new team and the transformative nature of this transaction" said Luis Zapata, Chief Executive Officer of Western Pacific. He continued "The Coriorcco and Las Antas projects are ideally located in an established mining district and have shown impressive gold grades in very limited past production. The market is rewarding to projects with the potential to be high-grade low-cost mines, and we will move expeditiously to advance the projects in that direction".
The Coriorcco property is located in the San Juan de Lucanas Mining District and consists of two contiguous mineral concessions in an established metallogenic belt recognised for its epithermal Au-Ag mineralisation potential. The belt hosts multiple producing mines including Hochschild's Inmaculada and Pallancata gold-silver operations 100 km down strike. Both operations exploit high to low sulphidation epithermal systems and have collectively produced 100 Moz Ag & 1.1 Moz Au with 33.5 Moz Ag & 633 Koz in proven and probable reserves. Numerous publicly-listed exploration companies are also active in the area and 9 toll-milling plants service local artisanal miners.
Mineralisation at the property is related to epithermal veins with a close spatial relationship to a volcanic dome (Coriorcco Dome Structure) with significant silicification and argillization. Seventeen (17) veins have been mapped at the property, the most common vein orientations are northwest and east-northeast. Vein 3 and Vein 6, the two most significant veins, strike approximately east-northeast, antithetic to the Andean Trend, a regionally significant orientation that exercises structural control on mineralisation throughout the Peruvian Andes. Veins pinch and swell along-strike and down-dip. Vein 3 and Vein 6 have been mapped on surface and extend 280m and 405m respectively. Crustiform quartz-carbonate veins and surrounding wall rock contain minor sulphides.
Previous exploration activity included surface channel sampling and follow-up trial mining from 2010 to 2011. Three portals were developed and over 400m of sub-horizontal mining was completed on three veins up to 60 m below surface, within the silica cap of the Coriorcco Dome. The three portals were sunk into the side of the Dome, to the east and west of the major vein swarm, and followed mineralized Vein 3, 6 and an unnamed vein. There are 15 additional veins visible on surface within the broader vein swarm that require systemic mapping and sampling.
Historical mining of veins 3 and 6 exploited over 5,720 tonnes of material and was shipped to a third-party mill for processing. The underground minable width of the vein system ranged from 0.8 m to 2.5 m and the material produced had an average head grade of 7.5 g/t Au.
Limited surface rock sampling by the previous operators include:
Average grade from surface sampling 1.91 g/t Au over 181 samples
Further encouraging sampling for underground workings to be verified
Historic sample results have not been verified by the Company, and readers are cautioned not to place undue weight on such results. The historical grades are considered relevant; however, the reliability, assumptions, parameters and methods used in preparing the reports are unknown. Chip samples are selected from a larger population of samples and are not indicative of the average grade of mineralization hosted on the Coriorcco Property.
Las Antas Property
The Las Antas property consists of two contiguous mineral concessions immediately to the south of the Coriorcco Concessions. It lies in the same established metallogenic belt recognised for its prospectivity for epithermal Au-Ag mineralisation, and polymetallic veins. The property hosts a large zone of extensive hydrothermal alteration developed in volcanics at the junctions of regionally significant northwest and northeast trending faults.
Two named prospects have been established at the property based on observed hydrothermal alterations:
Yuracmarca is an approximately 1.9 x 1.4 km area in the northwestern part of the Property, with pervasive hydrothermal alteration including, propylitization and argilization.
Cerro Amarillo is an approximately 3.0 x 1.5 km area in the central and southwestern part of the Property with intense silicification.
Artisanal and small-scale miners have been intermittently active in the areas around the Property and wider San Juan de Lucanas Mining District since pre-colonial times.
New Board and Advisors
Upon closing the Transaction, the Company will add Mr. Paul Matysek as Lead Advisor and Mr. Nick Rowley, nominee of Titan, as a director to its board.
Mr. Matysek is a geologist/geochemist by training, a successful alpha entrepreneur and consistent creator of shareholder value, with over 40 years of experience in the mining industry. Since 2004 Mr. Matysek has sold five publicly listed exploration and development companies, in aggregate worth over $2 billion. Currently, Mr. Matysek is the CEO of Gold X Mining Corp., which is advancing the Toroparu Project in Guyana.
Mr. Rowley is an experienced corporate executive with a strong financial background with over 15 years' experience specialising in corporate advisory, M&A transactions and equities markets. He has advised on the equity financings of numerous ASX and TSX listed companies predominantly in the mining and resources sector. Mr. Rowley currently serves as Non-Executive Director of Titan Minerals (ASX:TTM) and holds an executive role at Galaxy Resources Ltd (ASX:GXY). He was also founder and Non-Executive Director of Cobalt One Ltd (ASX:CO1) which was acquired by Canadian listed First Cobalt Corporation (TSX:FCC) in 2017.
Pursuant to the terms of the Option Acquisition Agreement, Western Pacific will acquire Titan's legal and beneficial right, title and interest in options to acquire: (a) 100% of the legal and beneficial interest in and to a 2,000 hectare concession known as the Coriorcco property pursuant to a cession and option agreement (the "Coriorcco Option Agreement"); and (b) up to 85% of the legal and beneficial interest in and to 1,400 hectare concession known as the Las Antas Property (together, the "Properties") pursuant to an earn-in agreement (the "Las Antas Earn-in Agreement").
As consideration for the acquisition of the option rights over the Properties, Western Pacific will: (a) pay cash consideration of USD $1,500,000 of which USD $100,000 has already been paid to Titan as a deposit; and (b) issue to Titan and its nominees 7,050,000 Western Pacific common shares (the "Shares"); and (c) reimburse Titan up to USD $150,000 in relation to certain expenses incurred in connection with the Properties.
If the Company exercises its option to acquire the Coriorcco property, Western Pacific will grant to Titan a 1% net smelter royalty (the "NSR") over the Coriorcco property.
Additionally, the Company has agreed to make a conditional payment to Titan (in cash or Shares at Western Pacific's option) based on the size of the mineral resource (in the measured and indicated category) that is established on the Coriorcco property in a technical report prepared in accordance with National Instrument 43-101.
Titan will receive:
(i) USD $1,000,000 if a measured and indicated resource of 500,000 to 999,999 ounces of gold is established (ii) USD $1,500,000 if a measured and indicated resource of 1,000,000 to 1,499,000 ounces of gold is established (iii) USD $2,000,000 if a measured and indicated resource in excess of 1,500,000 ounces of gold is established
At closing, the Company will enter into an Investor Rights Agreement with Titan in which Titan will be granted certain ancillary rights. The Investor Rights Agreement will grant Titan an anti-dilution right, a board nomination right and certain information rights. The Investor Rights Agreement will terminate in the event that Titan's Share ownership falls below 5%. The Company also anticipates paying a finder's fee consisting of 764,695 Shares in connection with the Transaction to an arm's length third party, subject to TSX Venture Exchange (the "Exchange") acceptance.
This Transaction is subject to: (i) the completion of a private placement for minimum gross proceeds of C$4,000,000; (ii) the receipt of all necessary consents, approvals, authorizations (including Exchange approval) for the Transaction; and (iii) other customary conditions for a transaction of this type.
The Transaction, if completed, is a Fundamental Acquisition, as defined under the policies of the Exchange. The arm's length Transaction will not require Western Pacific shareholder approval and trading of the Company's common shares will be halted, Pursuant to Exchange policy.
Change of Name
On the closing of the Transaction, subject to Exchange acceptance, the Company will change its name to "Oro X Mining Corp."
Pursuant to the terms of the Option Purchase Agreement and concurrent with the closing of the Transaction, Western Pacific will offer a private placement (the "Private Placement") of 15,243,902 common shares of Western Pacific at a price of $0.41 per Share for gross proceeds of $6,250,000. The Company may pay finder's fees on the Private Placement in cash or share purchase warrants or a combination of thereof within the maximum amount permitted by the policies of the Exchange.
Western Pacific intends to use the net proceeds of the Private Placement to fund the costs of the Transaction, for exploration of the Properties, for expenses associated with expanding the Company's operations to Peru and for general working capital purposes.
Coriorcco and Las Antas Option Agreements
Under the Coriorcco Option Agreement, Western Pacific will have the right to acquire a 100% interest in the Coriorcco property by making a payment of USD $3,000,000 plus general sales tax and granting a production royalty to the underlying concession holder (the "Coriorcco Royalty").
If Western Pacific exercises the option to acquire the Coriorcco property, the royalty payments are calculated as follows:
Price per dry metric tonne of gold bearing ore
Before 4 years
After 4 years
The Coriorcco Royalty can be repurchased for USD $1,000,000 (the "Buy-Back Right") prior to the fifth anniversary of the Coriorcco Option Agreement. Every year following the fifth anniversary of the Coriorcco Option Agreement, the cost of the Buy-Back Right increases by 10%.
Pursuant to the Las Antas Earn-in Agreement, Western Pacific will have the right to acquire up to an 85% interest in the Las Antas property.
Western Pacific can earn-in a 60% interest by:
Spending USD $2,000,000 within the earn-in period (which runs for two years from the date on which all applicable permits have been obtained).
Making a payment to the underlying concession holder of USD $450,000.
Once Western Pacific has obtained a 60% interest in the Las Antas property it will form a joint venture with the underlying concession holder (the "Las Antas Joint Venture").
Following the creation of the Las Antas Joint Venture, Western Pacific can obtain a further 25% interest in the Las Antas property, as follows:
(i) 5% interest from the underlying concession holder prior to the completion of a pre-feasibility study for USD $500,000 (ii) 10% interest from the underlying concession holder by completing a pre-feasibility study (iii) 5% interest from the underlying concession holder following the completion of a pre-feasibility study for USD $1,000,000 (iv) 5% at any time within 60 days following the commencement of commercial production from the Las Antas property for USD $1,000,000
Information Related to the Properties
The Properties are contiguous and located in the Ayacucho Region of Peru, approximately 80km's northeast of the city of Nazca, in south-western Peru. Further information concerning the Properties will be included in NI 43-101 technical reports to be filed for each of the Properties which will be available under the Company's profile at www.sedar.com.
Mr. John E. Bolaños, who is a qualified person under NI 43-101, has reviewed and approved the technical content of this news release and will continue consulting the Company for future press releases. Mr. Bolaños is a M.Sc. Mining Geologist from Camborne School of Mines (U.K.) and a Professional Geologist Eng. from The Central University of Ecuador (honours degree). He is a registered member (ID 4172671) of the Society for Mining, Metallurgy & Exploration (SME) of the United States; Director of the Ecuadorian College of Engineers in Geology, Mines, Oil and Environment; and a member of the Mining Chamber of Ecuador. He has 27 years of experience in the exploration and mining industry throughout the Americas.
ON BEHALF OF THE BOARD
Luis Zapata CEO & Director
ABOUT WESTERN PACIFIC
Western Pacific Resources is a gold exploration company based in Canada with a focus on Latin America. The company recently announced a transformative transaction to acquire previously producing high grade gold exploration assets in Peru and subject to the closing of the transaction will be renamed Oro X Mining.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Completion of the Transaction is subject to a number of conditions, including but not limited to, Exchange approval and the receipt of all regulatory consents required for the completion of the Transaction. There can be no assurance that the transaction will be completed as proposed or at all.
The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.
This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities described in this news release in the United States. Such securities have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), or any state securities laws, and, accordingly, may not be offered or sold within the United States, or to or for the account or benefit of persons in the United States or "U.S. Persons", as such term is defined in Regulation S promulgated under the U.S. Securities Act, unless registered under the U.S. Securities Act and applicable state securities laws or pursuant to an exemption from such registration requirements.
Cautionary Statement Regarding "Forward-Looking" Information
Some of the statements contained in this news release are forward-looking statements and information within the meaning of applicable securities laws. Forward-looking statements and information can be identified by the use of words such as "expects", "intends", "is expected", "potential", "suggests" or variations of such words or phrases, or statements that certain actions, events or results "may", "could", "should", "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements and information are not historical facts and are subject to a number of risks and uncertainties beyond Western Pacific's control. Actual results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking statements contained in this news release. Accordingly, readers should not place undue reliance on forward-looking statements. Western Pacific undertakes no obligation to update publicly or otherwise revise any forward-looking statements, except as may be required by law.
SOURCE Western Pacific Resources Corp.
For further information: Western Pacific Resources Corp., Luis Zapata, CEO, +1 236 858 9593, [email protected]