Red Metal Resources Finalizes Acquisition of Additional Mining Concession for Farellon Property
June 17, 2015
THUNDER BAY, ON and VALLENAR, CHILE, June 17, 2015 – Red Metal Resources Ltd. (OTC PInk:RMES), a mineral exploration company with copper-gold assets in Chile (the “Company”), is pleased to announce that its Chilean subsidiary, Minera Polymet Limitada, (“Polymet”) has signed an option to earn 100% interest in a mining concession contiguous to the Company’s Farellon Property. The concession is 235 hectares, adding approximately one kilometer of strike length of vein along the same trend as the previously drilled vein zone on the Farellon Property and a further 1.5 kilometres of untested vein.
Polymet may acquire 100% of the mining concession by paying a total of US$150,000 over four years. The payment schedule for the option agreement is as follows:
USD$25,000 upon execution of the Option Agreement;
USD$25,000 within 12 months from the date of execution of the Option Agreement;
USD$25,000 within 24 months from the date of execution of the Option Agreement;
USD$25,000 within 36 months from the date of execution of the Option Agreement;
USD$50,000 within 48 months from the date of execution of the Option Agreement.
The vendor will retain a 1.5% NSR on the concession and Polymet will have the right to purchase 100% of the NSR for a one-time payment of USD$750,000 any time after acquiring 100% of the property. Should the Company choose to mine the property prior to acquiring the option, the Company will be obligated to pay a minimum monthly royalty of USD$2,500 up to 5,000 tonnes, and a further USD$0.25 for every additional tonne mined.
The new mining concession adds ground to the Farellon property directly along strike from the present mining operations. Several historic artisanal workings on the concession show potential for further high grade copper and gold mineralization near surface. Due diligence sampling of veins on the new concession returned results as listed in the table below:
The Farellon Property presently consists of seven mining concessions totaling 1,002 hectares; the addition of the new claim will increase the size of the property to 1,237 hectares. The property is located in the Carrizal Alto mining district located approximately 75 kilometers northwest of the city of Vallenar, 150 kilometers south of Copiapo and 20 kilometers west of the Pan American Highway. The property is easily accessible year round by dirt roads that crisscross the property and is located close to power, water and a major urban centre, Copiapo, with a readily available mining workforce.
Caitlin Jeffs, P.Geo., President & CEO of Red Metal stated: “This additional mining concession completes our property acquisition plans for this project and provides us with numerous additional targets to expand on our property potential.”
Caitlin Jeffs, P. Geo., President & CEO of Red Metal, the project’s Qualified Person as defined in NI 43-101, has reviewed and approved the contents of this news release.
About Red Metal Resources Ltd. http://www.redmetalresources.com/news/index.php?&content_id=91