La Coipita

AbraSilver has entered into option agreements to acquire an interest in the La Coipita project, located in the mining-friendly San Juan province, Argentina.  The project is located in the prolific Miocene porphyry-epithermal belt and hosts multiple porphyry copper-gold targets.

Proposed Earn-In Option & Joint Venture Agreement With Teck Resources

On January 22, 2024, AbraSilver announced it had executed a definitive option and joint venture agreement (the “Agreement”) with a subsidiary of Teck Resources Limited (“Teck”), to explore and develop the La Coipita copper-gold project in San Juan, Argentina

Key Terms of the Transaction:

The Agreement grants Teck an option (the “Option”) to acquire an 80% interest in the Project, which it may exercise by:

  • Making the following payments to or equity placement in AbraSilver:
    1. Initial mandatory cash payment of US$500,000;
    2. On or before January 31, 2025, a cash payment of US$1,000,000 or at Teck’s election, subscription for US$1,000,000 of common shares of AbraSilver (“ABRA Shares”) to be priced at the greater of (a) a 25% premium to the preceding 20-day volume weighted average price on the ABRA Shares on the TSX Venture Exchange, or (b) C$0.35 per ABRA Share; and
    3. On or before January 31, 2028, a cash payment of US$1,500,000.
  • Incurring an aggregate of US$20,000,000 in exploration expenditures on the Project over a five-year period; and
  • Making up to US$6,300,000 in optional cash payments in respect of amounts payable to the underlying Project vendors.

Upon exercise of the Option, the parties will incorporate a company in Argentina (“Newco”) to become the titleholder of the Project. 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 the Project 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 Option Agreement, its shareholding interest will be converted to a 1.1% net smelter returns royalty on the Project, of which 0.6% can be bought back by the payor for a cash payment of US$3,000,000 at any time.

The La Coipita Project 

The La Coipita project is a district scale property consisting of over 70,000 hectares in the western portion of Calingasta Department, located in the mining-friendly San Juan Province of Argentina, adjacent to the Chilean border.  Access to the area is via Calingasta, the nearest town, along 125 km of unpaved road to the Los Azules Cu-Mo porphyry project and then north along a dirt road to the La Coipita Cu-Au project. Elevation across the property ranges between 3,500 and 4,500 MASL with moderate to high relief.

The Project lies within the Miocene porphyry-epithermal belt of Argentina and Chile.  During the mid-Miocene, the area developed an active magmatic arc, on its western side and a back-arc extensional environment to the east. Contemporaneous with the deposition of volcanic/volcaniclastic rocks was the emplacement of porphyry Cu-Mo-Au and/or epithermal Au-Ag (Cu) systems (e.g. Filo del Sol high-sulphidation epithermal Cu-Au-Ag deposit with Cu-Au porphyry, Los Pelambres/El Pachón Cu-Mo porphyry, Los Azules Cu-Au-Mo porphyry, El Indio/Veladero/Pascua Lama high-sulphidation epithermal Au cluster).

Numerous target areas have been identified at La Coipita. These target areas have coincident geophysical, geological and geochemical features that are consistent with copper-gold mineralized porphyry-type intrusions, either beneath high-sulphidation systems or in structurally uplifted areas. To date, drilling has only been conducted on the La Coipita target, where the initial results have identified the potential for a major Cu-Au-Mo porphyry system.  Significant exploration upside potential is believed to exist at the La Coipita target & across multiple other promising regional targets (as shown in the Figure below).

La Coipita Location Map

Geological Setting

La Coipita Regional Exploration Target Areas

Geological Setting

Initial Drill Hole Returned Broad Zones of Porphyry Mineralisation Including 226 Metres of 0.43% CuEq and 146 Metres of 0.30% CuEq

In 2022, AbraSilver completed its maiden drill campaign at La Coipita, which consisted of two initial deep holes to test a potential large copper-gold-molybdenum porphyry target.

The results were announced on June 28, 2022.  Highlights include:

  • Hole DDHC 22-002: intersected a continuous copper-gold porphyry zone of 226m grading 0.43% CuEq marking a significant new discovery on the project.
    • Mineralisation remains open at depth, as the hole ended within a separate interval of 146m of 0.30% CuEq down to a depth of approximately 1,200m.
    • Porphyry style mineralisation was encountered within the host rocks believed to be adjacent to the central porphyry intrusive progenitor, which has not yet been intersected. 
  • Hole DDCH 22-001 intersected high sulphidation mineralisation with multiple high-grade narrow zones of copper and gold veining.
  • Drill results were targeted at a surface geochemistry pattern interpreted as being a reflection of an underlying porphyry system, with estimated approximate dimensions of 2.0km by 1.5km.

2023 - La Coipita Exploration Program

The 2023 exploration program consisted of one deep hole at the La Coipita target (DDHC 23-001). 

As announced on July 12, 2023, the hole returned a broad interval of copper-molybdenum porphyry mineralization of 694.3 metres grading 0.16% copper and 81 ppm molybdenum. The hole intersected a broad zone of pyrite and associated chalcopyrite mineralisation in fine disseminations and stockwork veining in a major porphyry system. Secondary coatings and replacements of these sulphides with covellite and chalcocite is widespread and a subsequent phase of quartz veining hosts molybdenite. The mineralisation occurs mainly in a granite which is host to the progenitor porphyry intrusion that was not intersected in this hole.

La Coipita Drill Assay Section (Looking West)

Additionally, aside from drilling the La Coipita target, the Company conducted reconnaissance surface geochemical sampling and geological mapping over other target areas within the La Coipita concession block which encountered multiple anomalous results.  At the Valle Hermoso target, located approximately 25 kilometres south of La Coipita, a high-grade grab sample contained 3.49% copper, 0.42 g/t gold and 20.6 g/t silver.   The samples at Valle Hermoso are interpreted as being part of a high sulphidation system related to an underlying porphyry body and represent a valid exploration target for potential future drilling. 

Summary of Select Samples Above 0.5% Cu

Target  UTM Coordinates  Sample (#)  Cu (%)  Au (g/t)  Ag (g/t) 
Valle Hermoso  E381628 N6591373  7806 3.49  0.42  20.6 
Valle Hermoso  E381625 N6591392 7805 0.67  0.25  2.3 

Note:  The reader is cautioned that grab samples are selective by nature and do not necessarily represent the true metal content of the mineralized zones.  

The company has entered into two separate option agreements with arm’s length private owners.   

The first agreement, announced on March 02, 2020 includes the following payments to acquire a 100% interest:

Timing Payments (US$)
Paid upon signing $65,000
March 2021 (paid) $100,000
March 2022 (paid) $200,000
March 2023 (paid) $400,000
March 2024 $1,000,000
March 2025 $2,500,000

As per the terms of the Option Agreement, the Vendor will retain a 1.10% net smelter return royalty (the “NSR Royalty”).  AbraSilver has assigned to Altius Resources Inc. (a wholly owned subsidiary of Altius Minerals Corporation) an exclusive right to repurchase the royalty for US$3,000,000 at any time during the term of the option agreement, or US$5,000,000 thereafter until start-up of construction of the Project.

The second agreement, announced on August 17, 2021 includes the following payments for a 100% interest:

Timing Payments (US$)
Paid upon signing $50,000
August 2022 (paid) $75,000
August 2023 (paid) $200,000
August 2024 $400,000
August 2025 $800,000
August 2026 $1,500,000

As per the terms of the Agreement, the Vendor will retain a 1.10% net smelter return royalty on the La Coipita Claims and AbraSilver has an exclusive right to repurchase the royalty for US$5,000,000 at any time.

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