Situated in a region with excellent access and infrastructure, and in a geological setting that is noted for the occurrence of several copper-gold deposits, the Llanos Project is considered highly prospective for the discovery of a buried porphyry copper body.
The Llanos Project, located in Chile's Region IV close to the city of Illapel, is approximately 250 km north of Santiago and is situated in a region with excellent access and existing infrastructure. Numerous underground copper mines occur in the area and the Llanos project is considered to have potential for a substantial copper-gold-molybdenum porphyry body, together with associated higher-grade breccia and shear zone bodies.
Highlights of the Project
The Llanos project is strategically situated between the Llahuin and the El Espino copper-gold projects.
- The Project is located ~4km southwest of the Llahuin project which is a cluster of porphyries (owned 70% Hudbay Minerals Inc. (optionee) / 30% Southern Hemisphere Mining Ltd.), and ~3km northeast of the El Espino project, which is an IOCG deposit (owned 100% by Pucobre [Sociedad Punta del Cobre S.A.]).
The Llanos area is considered highly prospective and hosts small scale mines in operation as well as historical mines. The Gomila Prospect is the Company's first property secured in the Llanos area, and Aethon continues to actively evaluate other opportunities to further consolidate its position in the region.
The Gomila mineral concessions (the "Gomila Prospect") have an area of approximately 400 hectares and cover the northern part of the mineralised system.
- Surface geochemical sampling demonstrates that the Gomila Prospect has highly anomalous copper, gold, molybdenum and potassium, which are interpreted as reflecting a buried porphyry intrusion.
Geology and Mineralisation
The schematic cross section below shows the geological relationship between Llanos, the adjacent El Espino IOCG deposit and Llahuin porphyry bodies. It is interpreted that a major Paleocene porphyry body lies buried beneath the anomalous geochemical signature at Llahuin.
A large area of gossanous outcrop includes long shear zones that extend northwards into the adjacent valley where they have been exploited underground for copper at the Encantadora mine. Spectacular secondary copper mineralisation is evident in the mine, together with disseminated chalcopyrite.
These gossanous shear zones on which underground copper mines have been developed are among the principal drill targets at this stage. Proposed detailed geological mapping and channel sampling, together with ground magnetics and I.P. are expected to refine drill targets along this zone and potentially demonstrate additional porphyry copper targets.
Summary of Llanos Agreement
Aethon Minerals Corp. (the "Company") through its wholly-owned subsidiary, Aethon Minerals Chile SpA, entered into an Option Agreement with Sociedad Legal Minera La Florida De Canela (the "Optionor"), an arm's length private Chilean company. In order to exercise the option, the Company is required to complete the following payments to acquire a 100% interest in the Llanos De Llahuin project:
|Paid on signing||$100,000|
|By November 15, 2018||$100,000|
|By May 15, 2019||$150,000|
|By November 15, 2019||$500,000|
|By May 15, 2020||$650,000|
|By May 15, 2021||$1,800,000|
|By May 15, 2022||$3,000,000|
As per the terms of the Option Agreement, the Optionor will retain a 2% net smelter return royalty, of which Aethon will maintain the exclusive option to acquire at any time, in its entirety, for a one-time cash payment of US$4,500,000.
The back-end weighted option payment structure provides the Company with a low-risk opportunity to conduct exploration activities to assess whether it will continue advancing the Project.
The Company's first phase exploration program on the Project will include detailed geological mapping, chip and channel sampling, together with ground magnetics and induced polarisation surveys. This program will help define drill targets for an initial 1,000 meters of diamond drilling which is expected to be conducted prior to the second payment instalment.
The Company's proposed initial drill program is expected to include four 250-metre holes, spaced approximately 300 metres apart, along an east-west line across the mineralised system. The final drill design will depend on results of detailed geological mapping, ground geochemistry and geophysical surveys. Following the Project's initial phase of the exploration program and the interpretation of results, the Company shall determine an appropriate second phase exploration program.
Mr. Michael R. Schuler, an independent consulting geologist, is a qualified person as defined by National Instrument 43-101. Mr. Schuler has reviewed the scientific and technical information that forms the basis of the summary above and has approved the disclosure herein. Mr. Schuler is independent of the Company.