Eurasian Minerals Inc. (TSXV:EMX,NYSE:EMXX) executed an Option Agreement to sell the Akarca property in northwest Turkey for a combination of cash payments, gold bullion, work commitments, and a royalty interest. The Agreement also gives Çolakoglu Ticari Yatirim A.S. the option to acquire the Company’s 100% owned subsidiary, AES Madencilik A.S. who is a Turkish corporation that controls the Akarca property.
As quoted in the press release:
The Agreement requires Çolakoglu to make an up-front payment of US $250,000. In order to exercise the option, Colakoglu must drill at least 5,000 meters by the end of the first year, and must make a US $500,000 payment on exercise of the option. The option cannot be exercised until 18 months after the signing of the Agreement. Thereafter, subject to a right to terminate the Agreement and return the shares of AES Turkey to the Company, Colakoglu must make additional cash payments totaling US $4,250,000 over a period of three years after exercise of the option, must drill a cumulative 20,000 meters over a period of four years after the Agreement date, and must produce a NI 43-101 compliant feasibility study after the sixth year. In addition, Colakoglu must deliver 8,000 troy ounces of gold to an EMX subsidiary by the first anniversary of commercial production from a mine on the project, and must make bonus payments to the EMX subsidiary based on cumulative life of project reserves as follows: once reserves are more than 1.35 million troy ounces of gold, deliver 3,500 troy ounces of gold; once reserves are more than 1.7 million troy ounces of gold, deliver an additional 3,500 troy ounces of gold; and once reserves are more than 2 million troy ounces of gold, deliver an additional 3,000 troy ounces of gold. In addition to the cumulative US $5,000,000 cash payments and gold payments of up to 18,000 ounces, the Company will receive a 3.5% Net Smelter Return (NSR) royalty on any production from the property. This royalty is uncapped, cannot be bought down, and none of the pre-production cash or bullion payments count as advanced royalty payments.