Aegean Metals Group Inc. (TSXV:AGN,FWB:A91) has entered into an Option Agreement with Lidya Madencilik Sanayi ve Ticaret A.S., a Turkish exploration company. Under the terms of the agreement, Lidya may earn a 70 percent interest in Aegean’s Hot Maden gold-copper prospect located in Artvin Province, Eastern Turkey.
As quoted in the press release:
Under the terms of the Agreement, Lidya can earn a 70% interest in the Property by incurring USD$3M of combined exploration expenditures and cash payments to Aegean as per the following schedule:
- Lidya will commit to a minimum exploration expenditure at Hot Maden of USD$500,000 in Year 1 of the option agreement, after which time Lidya will receive a 20% interest in the Property. This minimum work commitment will also include at least 800 m of diamond drilling.
- Upon the completion of the Year 1 commitment, Lidya will then have a 60 day period to decide whether to continue with the earn-in agreement (in which case a USD$150,000 cash payment will be made to Aegean) or to discontinue with the earn-in.
- Lidya would then have the right to earn-in to a further 50% interest in the Property (for an aggregate total of 70%) by spending an additional US$2M on the Property and by making a cash payment to Aegean of USD$350,000 by the end of Year 4.
- After completion of the earn-in period a Special Purpose Vehicle or “Newco” will be formed, in which the initial shareholdings will be Lidya 70% / Aegean 30%. An industry standard dilution formula will apply to any party that does not contribute on a pro-rata basis to subsequent expenditures. In the event that either parties’ interest falls below 10%, the interest will either be purchased by the other party at fair market value or revert to a 0.5% NSR.
- Lidya will be the operator during the earn-in period.
Aegean CEO, Eric Roth, said:
Aegean is very pleased to be partnering with Lidya to advance the Hot Maden prospect. Lidya is a well-respected, Turkish company and their geological knowledge of the area will be essential in advancing the Property with further exploration and through to the drilling stage.