In Mohave County, Arizona, Bitterroot's wholly-owned subsidiary Trans Superior Resources, Inc. ("Trans Superior") has entered into an option agreement to acquire 100% interests in the 21-claim PCM group. The Company has also entered into an option agreement on three (3) additional unpatented mining claims covering the past-producing Silver King mines. In addition, the Company has staked or optioned claims covering approximately 1,500 acres of surrounding Federally-managed public lands and leased mineral rights covering 1,314 acres held by a subsidiary of Newmont Mining Corporation.
Details of the recent sampling program on the PCM claims are included in Bitterroot's news release dated June 7, 2018.
Under the terms of the Option on the PCM claims, the Company has made an initial payment of US$50,000. To complete the exercise of the Option and acquire a 100 percent interest in the PCM patented claims, the Company is required to pay the vendor US$50,000 on the first anniversary date, plus US$75,000 on the second anniversary date, for total consideration of US$175,000.
In January 2017, the Company entered into an option agreement with Ely Gold Royalties Inc. ("Ely", symbol ELY, TSX-V) and Ely's wholly-owned subsidiary Nevada Select Royalty Inc. ("Nevada Select") to acquire a 100% interest in three unpatented claims covering the past-producing Silver King North and Silver King South underground workings. The terms of this Option are currently being modified.
Trans Superior has also entered into an agreement with a subsidiary of Newmont Mining Corporation to lease 1,314 acres of mineral rights on the south, west and north sides of the PCM claims. In return for the mining lease, Trans Superior has agreed to pay advance minimum royalties as follows;
(a) US $10,000 on the effective date of the lease (paid);
(b) US $10,000 on or before the first anniversary of the effective date;
(c) US $15,000 on or before the second through ninth anniversaries of the effective date and;
(d) US$20,000 on or before the tenth and each anniversary thereafter.
Trans Superior retains an option to incrementally reduce the acreage under lease to a minimum of 960 acres, which will result in a pro-rata reduction in the advance royalties payable. Newmont will retain a four percent (4.0%) net smelter returns royalty ("NSR") on all minerals or concentrates produced, sold and shipped from the Property. Trans Superior retains a one-time option, exercisable at any time during the term of the lease, to reduce the NSR royalty from four percent (4%) to two percent (2%) by paying Newmont US$2,000,000 if exercised during the first 10 years of the lease; or US$3,000,000 if exercised during the second 10 years of the Term.
The PCM claims, plus adjoining lands leased from Newmont and Trans Superior's 77 wholly-owned unpatented claims currently cover approximately five (5) kilometres of strike length on the north end of the Hackberry mineralized trend. The PCM claims and surrounding areas have emerged as a priority due to the presence of significant gold/silver mineralization, as compared to the south end of the Hackberry trend (Main Hackberry, Hackberry South, CMH and Silver King targets), which hosts erratically-distributed silver mineralization without significant gold.
Bitterroot's exploration of the PCM claims will initially focus on areas where the mineralized veins intersect crossing structures and will investigate the deeper potential of these veins and areas where they may intersect a projected low-angle detachment fault at depth. In the fall of 2018, the Company's plans to conducted detailed geological mapping and sampling on the PCM and surrounding claims. Aeromagnetic surveys covering the Hackberry structure and PCM claims will be used in conjunction with geological mapping and sampling to identify drill targets.
Mr. Glen W. Adams, P.Geo, is the Qualified Person responsible for the technical content of this disclosure.