In Mohave County Arizona, Bitterroot's wholly-owned subsidiary Trans Superior Resources, Inc. ("Trans Superior") has entered into two Option agreements to acquire a 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 high-grade silver producer 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 high-grade silver mine. 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.
The Company has staked 97 mining claims on surrounding Federal land and now controls lands covering over nine (9) kilometres (5.5 miles) of prospective strike length along the Hackberry silver-gold mineralized structure. In March and April 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. In June 2017, over 340 soil samples were collected along eight traverses across approximately six kilometres (3.7 miles) strike length of the Hackberry mineralized system. A detailed aeromagnetic survey covering the Hackberry structure has been completed.
These new geological, geochemical and geophysical data sets have identified several drill targets. The main priority for drilling is the area around the previous mine workings on the patented mining claims, which host reported silver grades ranging from 20 to over 200 oz silver per ton. This area has minimal permitting requirements. Drill-testing of targets on the patented claims is scheduled to start in early September 2017. Glen W. Adams, P.Geo, is the Qualified Person responsible for the technical content of this disclosure.