In Mohave County Arizona, Bitterroot's wholly-owned subsidiary Trans Superior Resources, Inc. ("Trans Superior") has entered into two Option agreements to acquire 100% interests in 12 patented mining claims and three (3) unpatented mining claims covering the past-producing Hackberry and Silver King silver mines. The Company has also staked an additional 97 claims covering approximately 2,000 acres of surrounding Federally-managed public lands.
In January 2017, the Company, through its US subsidiary, Trans Superior Resources, Inc., acquired an option (the "Option") from the Hughes Family Trust ("Hughes") to purchase a 100% interest in 12 patented lode mining claims comprising the core of the Hackberry property, a former underground silver mine in Mohave County, Arizona. Under the terms of the Option, the Company has made an initial payment of US$50,000 and issued 1,500,000 common shares to Hughes. To complete the exercise of the Option and acquire a 100 percent interest in the patented claims, the Company is required to pay, on or before each of the next four (4) anniversary dates of Exchange acceptance, US$62,500 and issue to Hughes 1,250,000 shares, for total consideration of US$300,000 and 6,500,000 shares of the Company. Hughes will also retain a 3 percent net smelter returns royalty (the "NSR") on the patented claims and 13 of the Company's unpatented claims. Following exercise of the Option, the Company can buy half (1.5 percent) of the NSR for US$1,500,000. On or before the fourth anniversary, the Company must have incurred or spent a cumulative minimum of US$1,000,000 on exploration expenditures.
Also in January 2017, the Company entered into an option agreement with Ely Gold & Minerals Inc. ("Ely", symbol ELY, TSX-V) and Ely's wholly-owned subsidiary Nevada Select Royalty Inc. ("Nevada Select") to acquire a 100% interest in the North Hackberry claims (the "Option"). The North Hackberry unpatented lode claims host the past-producing Silver King North and Silver King South underground workings. Under the terms of the Option, the Company will pay US$20,000 and issue 200,000 common shares to Ely (issued). On or before the first anniversary date of Exchange acceptance, the Company will pay US$30,000 and issue Ely 100,000 shares. On or before the second anniversary date of Exchange acceptance, the Company will pay US$50,000 and issue Ely 100,000 shares. On or before the third anniversary date of Exchange acceptance, the Company will pay US$50,000 and issue Ely 200,000 shares for total consideration of US$150,000 and 600,000 of the Company's shares to exercise the Option and acquire a 100 percent interest in the unpatented claims. Nevada Select will also retain a 3 percent net smelter returns royalty (the "NSR") on precious metals (defined as silver, gold and platinum), a 2% NSR on all other products sold from the property and a 0.5% NSR on any unpatented lands which the Company acquires within a 2.66-mile radius of the North Hackberry claims, excluding the Hughes claims.
The Company has staked 97 mining claims on surrounding Federal land and now controls lands covering over eight (8) kilometres (5 miles) of prospective strike length along the Hackberry silver-gold mineralized structure. In the spring and early summer of 2017, the Company's consulting geologists conducted detailed geological mapping and sampling on the Hackberry patented lode mining claims and reconnaissance mapping and prospecting over the rest of the claims. A detailed aeromagnetic survey covering the Hackberry structure was also completed. This work identified several drill targets.
In October and November 2017 Bitterroot's contractors tested these targets by drilling 1,582 metres in eight holes around the Main Hackberry and Hackberry South underground workings (Phase 1). In early March 2018, the Company plans Phase 2 drilling on the Silver King North, Silver King South and CMH targets, which are located on the Hackberry mineralized trend, some 0.4 to 2.0 kilometres northwest of the Main Hackberry mine. Glen W. Adams, P.Geo, is the Qualified Person responsible for the technical content of this disclosure.