Kootenay Silver Options Cervantes Gold-Copper Project

Kootenay Silver Inc. (TSXV:KTN) announced that Aztec Metals Corp. has optioned its Mexico-based Cervantes gold-copper project. The project was staked through Kootenay’s generative program via its wholly owned Mexican subsidiary.
As quoted in the press release:

The terms of the agreement allow Aztec to earn a 65% interest by spending an aggregate total US$1.5 million in exploration expenditures over 4 years (by July 25, 2019), to pay an aggregate total of US$150,000 in staged payments to the Company by July 25, 2019 and issue an aggregated total of 1,000,000 common shares of Aztec in staged payments on each anniversary with the final issuance payable 60 days after the fourth anniversary of July 25, 2019. Aztec will also be responsible for annual Mexican assessment work and mining concession taxes during the term of the agreement.
Upon earning the initial 65% interest and within 60 days of such date, Aztec will have the right to elect and acquire the remaining 35% interest by completing a preliminary economic assessment report (“Scoping Study”) by the fifth anniversary date (July 25, 2020), paying US$5.00 per gold or gold equivalent ounce of estimated recoverable, payable gold or gold equivalent ounce of the contained metal for the measured, indicated and inferred resources based on the Scoping Study. On acquisition by Aztec of 100% interest, Kootenay will receive a 2.5% net smelter royalty. If Aztec decide not to exercise the Second Option in order to acquire the remaining 35%, a joint venture will be formed to further develop the project. If at anytime during the process of exploration and/or development after the completion of the Scoping Study and before the completion of a feasibility study or production decision, an additional resource is delineated on the property Aztec shall have the right to acquire the remaining 35% interest under the same terms of acquiring the initial resource outlined previously.

James McDonald, president and CEO of Kootenay, commented:

We are very pleased to enter into an option agreement with Aztec Metals on our Cervantes Gold/Silver prospect in Sonora, Mexico. The agreement with Aztec represents our third successful option agreement in the past 12 months of our generative program. The agreement serves as a strong compliment to our previously announced option agreements over this same period, including optioning the Silver Fox property to the major copper mining company Antafogasta and the San Diego property to Alamos Gold. As we continue to advance our top priority La Negra silver discovery in Sonora, Mexico, our success finding and leveraging exciting new projects adds significantly to the intrinsic value in Kootenay, while providing maximum exposure to new discoveries and minimal share dilution through our generative program.

Click here to read the full Kootenay Silver Inc. (TSXV:KTN) press release.