Bravada Gold, Coeur Mining Sign LOI for Quito Property, Nevada

Bravada Gold Corporation (TSXV:BVA) has signed a Letter of Intent with Coeur Mining, Inc. for an option to earn into Bravada’s interest in the Quito Property, a past-producing gold property consisting of 342 claims in the Austin Gold trend in Nevada. Under the Letter of Intent, Coeur Mining may earn into Bravada’s interest in the Quito property, which can range from 49% to 100% over a period of 5 years by funding Bravada’s earn-in work commitments of US$2.5 million, with an initial cash payment of $10,000, cash payments of US$50,000 by 15 January 2016 and $50,000 on the first anniversary of the execution of a definitive Earn-In Option Agreement.
As quoted in the press release:

Coeur may earn into Bravada’s interest in the Quito property, which can range from 49% to 100% as described below, over a period of five years by funding Bravada’s earn-in work commitments of US$2.5 million, making an initial cash payment of $10,000, cash payments of US$50,000 by 15 January 2016 and $50,000 on the first anniversary of the execution of a definitive Earn-In Option Agreement, reimbursing Bravada’s US$93,600 cash bond for Quito by the end of 2017, and paying Bravada an option purchase price of US$2 million. If Coeur acquires Bravada’s interest in the Quito property, Bravada will retain a 2% NSR royalty on Coeur’s percentage of production from the property. Coeur will commit to paying annual claim fees of approximately US$57,000 during each of 2015 and 2016, after which Coeur may terminate the agreement. Bravada will be operator of the work programs during the earn-in phase and will be entitled to charge Coeur an overhead fee of 10% on funds expended as part of the work program.
The underlying owner of the Property has agreed to modify provisions of the underlying agreement with Bravada to match the terms above. As per the underlying agreement and upon completion of work expenditures of at least US$2.5 million, Bravada will have earned a 70% interest in the Property and the underlying owner will have to choose one of the following three options: a) elect to accept participation at 30% (Bravada 70%); or b) if more than 2 million ounces of gold have been delineated by Bravada’s earn-in work, the underlying owner may elect to earn a 51% interest (Bravada 49%) by paying Bravada (or Coeur, if Coeur elects to purchase the option) 300% of the amounts expended to date on the exploration program (including the $2.5 million expenditure by Coeur and other amounts expended, including for real estate taxes, maintenance of claims and other holding costs) and funding Bravada’s portion of capital with repayment from 80% of Bravada’s portion of cash flow; or c) elect not to contribute additional capital to development of the Property, in which case Bravada would be obligated to buy the underlying owner’s 30% interest for either 500,000 shares of common stock of Bravada or US$500,000 cash at Bravada’s election, and the underlying owner would retain a 2% net smelter royalty. Coeur’s option with Bravada would allow it to acquire whichever level of interest Bravada has earned after the underlying owner makes its one-time election.

Bravada Gold President, Joe Kizis, said:

The Quito property contains an impressive number of high-grade gold intercepts in historic drilling. Mineralization is interpreted as a deeply eroded “Carlin” system and is higher grade and more structurally controlled than less eroded “Carlin” deposits. Bravada created the first extensive database of historic drilling at Quito, utilizing it to create a 3D model of mineralization and geology. Three high-priority targets have been identified for drilling by this work, and several other showings on this large property may develop into drill targets with further surface work. One of the targets is currently permitted for drilling and modification of the permit will begin soon to include other targets. Quito is a good example of how Bravada adds value to its projects through good science and persistence, leveraging its portfolio of properties through partnerships with high-quality miners and explorers.
For Coeur, Quito represents a high-quality project with good exploration potential in Nevada, a stable political jurisdiction where we have over 25 years of operating experience,” comments Hans Rasmussen, Vice President of Exploration for Coeur. “In our exploration program, we are slowly building our portfolio through the current market downturn so we have a long pipeline of projects on which to draw future cash-flow in a higher metal price environment. From my 30 years of experience in the Nevada gold trends, I believe Quito has several of the characteristics of sediment-hosted gold system, the discovery of which would fit well with our portfolio of mines.

Click here for the full Bravada Gold Corporation (TSXV:BVA) press release.
Click here for the Bravada Gold Corporation (TSXV:BVA) profile.