Tocvan Ventures Corp said it has completed a due diligence process and completed and executed the final agreement to acquire Millrock Resources’ option to acquire up to 100% interest in the El Picacho mining concessions located in the state of Sonora, Mexico.
The project, located 140 kilometers north of Hermosillo in Sonora, Mexico, is fully accessible by road.
Extensive surface exploration has been conducted historically, defining five gold targets on the project. Millrock and Tocvan believe these targets will be ready for drill testing with surface confirmation via trenching. A permit is currently active to allow for trenching and drilling on the project.
WATCH: Tocvan Ventures completes Phase 2 drilling at Pilar, begins prep work for trench program in October
“This is a prime example of the ability of Tocvan to negotiate transactions which we believe add significant accretive value to Tocvan shareholders while allowing previous operators and landowners to benefit greatly from a successful outcome as Tocvan works to de-risk the property toward economic viability,” CEO Derek Wood said in a statement.
“We like to create win-win opportunities for all stakeholders and feel that we have accomplished this with execution of this agreement.”
Under the terms of the option agreement, Tocvan must make cash payments of US$1,989,600 to the underlying concession owners, the Suarez brothers, over a five-year term to acquire 100% interest in the project.
If Tocvan exercises its option to purchase a 100% interest from the Suarez brothers, Millrock will vest with a 2% net smelter return (NSR) royalty. Tocvan may purchase back 1% for US$1 million. The royalty contains a provision for an annual advance minimum royalty (AMR). The initial AMR payment to Millrock would be US$25,000. The amount of the AMR will double each year until commercial production occurs. Any AMR payments made can be deducted from NSR royalty payments.
Tocvan is an exploration development company, created to take advantage of the prolonged downturn in the junior mining exploration sector, by identifying and negotiating interest in opportunities where management feels they can build upon previous success.
Tocvan currently has approximately 29 million shares outstanding and is earning into three exciting opportunities, including the Pilar Gold-Silver project and the El Picacho Property within the Caborca Orogenic Gold Belt both located in Sonor, and the Rogers Creek Copper project in southern British Columbia.
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