La Coipita

La Coipita Project, San Juan, Argentina

La Coipita is a district-scale property covering over 70,000 hectares in the western San Juan Province, adjacent to the Chilean border.  Elevation across the property ranges between 3,500 and 4,500 MASL with moderate to high relief.  

The property lies within the prolific Miocene porphyry-epithermal belt of Argentina and Chile, host to numerous world-class deposits, including Filo del Sol, Los Azules, El Indio, Veladero, Pascua Lama and El Pachon.

On January 25, 2024 the Company executed a definitive option and joint venture agreement (the “Agreement”) with a subsidiary of Teck Resources Limited (“Teck’) to explore and develop La Coipita. Teck will be the operator for the duration of the Option (as defined below).

In 2024, Teck completed 2,476m of diamond drilling in five holes, along with geophysical surveys and target mapping.   The 2025 drill campaign marks the second year of the earn-in program.  

Pursuant to the Agreement, Teck has an option (the “Option”) to acquire an 80% interest in La Coipita. Teck may exercise the Option by:

▪ Making the following payments to or equity placement in AbraSilver:

1. US$559,545 cash payment upon closing of the agreement (optional payment - received);
2. US$1,000,000 cash payment or at Teck’s election, subscription for US$1,000,000 of common shares of AbraSilver (shares subscribed)
3. US$1,500,000 cash payment on or before January 31, 2028 (optional payment).

▪ Incurring an aggregate of US$20,000,000 in exploration expenditures on La Coipita over a five year period; and

▪ Additional cash payments in respect of amounts for expenditures required to settle payments to the Project optionors:

1. US$500,000 Initial payment (mandatory payment - received);
2. US$500,000 on or before July 31, 2024 (optional payment – received);
3. US$1,000,000 on or before January 15, 2025 (optional payment - received);
4. US$800,000 on or before July 31, 2025 (optional payment - received);
5. US$2,000,000 on or before January 15, 2026 (optional payment);and
6. US$1,500,000 on or before July 31, 2026 (optional payment).

Upon exercise of the Option, the parties will incorporate a company in Argentina (“Newco”) to become the titleholder of La Coipita. Teck will hold 80% of Newco’s outstanding shares, with AbraSilver holding the remaining 20%. Each party will fund its pro-rata share of future expenditures on La Coipita through equity contributions to Newco or incur dilution in Newco. If a party’s shareholding interest in Newco is diluted below 10% or pursuant to certain other conditions of the Agreement, its shareholding interest will be converted to a 1.1% net smelter returns royalty on La Coipita, of which 0.6% can be bought back by the payor for a cash payment of US$3,000,000 at any time.