The Huilacollo epithermal property is comprised of approximately 3,300 hectares of intense hydrothermal alteration that is consistent with epithermal Au/Ag mineralization over a four-kilometer by six-kilometer area. It is located 52 km from Tacna and is accessible by road with nearby high-voltage power lines and water. Contiguous to the Huilacollo property are the Tacora and Andamarca properties. Tier One’s technical team believes the epithermal system on the Tacora licenses is the continuation of the same oxide gold epithermal system observed on the Huilacollo licenses. The Andamarca license provides Tier One with a strategic land position that is considered important from an infrastructure standpoint if future mining were to occur.
The Huilacollo property has excellent infrastructure with access by road, nearby high voltage power lines and water.
Historical drilling has outlined a mineralized zone that is open for expansion along a 4km north-south trending corridor. Table 1 below highlights historical intercepts:
Table 1: Huilacollo selected intercepts
Intercepts were calculated using a minimum of a 0.2 g/t Au cut off at beginning and end of the intercept and allowing for no more than four meters of less than 0.2 g/t Au. True widths of the reported intercepts are believed to be approximately 60% of the drilled widths.
Higher grade zones within the mineralized zone appear to be focused along well defined feeder structures as highlighted by trench intercepts up to 38m at 6.7g/t Au and drill holes including 34m @ 2.14g/t. Importantly, the mineralization as currently defined, represents less than 10% of the area of first order geophysical targets defined by overlapping high resistivity and low chargeability zones that represent the potential for oxide gold mineralization within silica bodies. Initial exploration work will focus on rapidly establishing drill targets through structural mapping, trenching, volumetric sampling, and multi-spectral analysis with an initial drill program planned for the fourth quarter of 2016.
The Company acquired the rights to the Huilacollo property through an option agreement with a local Peruvian company, Inversiones Sol S.A.C. (the “Huilacollo Option”). Under the Huilacollo option, the Company may acquire a 100% interest, subject to a NSR, through a combination of work expenditures and cash payments as detailed in the table below.
The Tacora and Andamarca concessions were acquired in two seperate transactions with private Peruvian owners. Under the terms of the Tacora acquisition agreement, the Company paid US $200,000 on signing of the Public Deed transferring the concessions in favor of Corisur Peru SAC. The Tacora concessions are subject to a 0.5% NSR, 50% of which is buyable for US $0.5 million. Under the terms of the Andamarca acquisition agreement, the Company paid US $450,000 on signing of the Public Deed transferring the concession in favor of Corisur Peru SAC. The Andamarca concession is subject to 1.5% NSR, 50% of which is buyable for US $2.5 million.
|Due dates||Property Payments||Work Expenditures|
|All amounts in US dollars|
|Effective Date (May 31, 2016) - COMPLETED||$ 250,000||-|
|Within 24 months of the Effective Date - COMPLETED||$ 500,000||$ 2,000,000|
|Within 36 months of the Effective Date - COMPLETED||-||$ 3,000,000|
|Within 48 months of the Effective Date - COMPLETED||$ 250,000||-|
|Within 60 months of the Effective Date||$ 250,000||$ 2,000,000|
|Within 72 months of the Effective Date||$ 7,500,000||-|
|Total||$ 8,750,000||$ 7,000,000|
Tier One holds its interests in Peru through Corisur Peru SAC, which controls (among other) certain licenses (including the Huilacollo project) that are located within a special legal zone which runs 50km back from the Peruvian border. As a non-Peruvian company, Tier One’s right to ultimately acquire title over the shares issued by Corisur Peru SAC and to own and/or exploit these licenses requires approval from the Peruvian government. While Tier One is in the process of submitting its applications with respect such the approval and does not currently foresee any legal reason why it would be denied the approval, some risk of denial or delay should be assumed to exist.