Canada-based Allied Copper has acquired the option to purchase a 100% stake in Klondike Property located in Colorado, US.

The option agreement was signed in December 2021 with Cloudbreak Discovery, Cloudbreak Discovery (Canada), Tarsis Resources US and Alianza Minerals, collectively known as the ‘optionors’.

In order to acquire the stake, Allied Copper is required to incur $4.75m in exploration expenditure over a four-year period on the Klondike project.

Of this, at least C$500,000 is required to be spent by the firm prior to the first anniversary of the closing of the deal.

Furthermore, Allied Copper will make an aggregate cash payment of $400,000 to Cloudbreak Subco and Alianza over a four-year period, and in accordance with their pro-rata interest.

Allied Copper will also issue seven million of its common shares to Cloudbreak Subco and Alianza, prior to the second anniversary of the closing of the transaction.

On the third anniversary of the date of the option agreement, Allied will issue three million common share purchase warrants to Cloudbreak Subco and Alianza, according to their pro rata interest.

In the event of exercising the option, Allied will grant a 2% net smelter returns royalty (NSR) in favour of the optionors.

Located 25km South of Naturita, Colorado, and within the Paradox Copper Belt of San Miguel County, the Klondike property comprises 76 unpatented mining claims.

The project also includes a State of Colorado Exploration Permit, as well as an exclusive right to a state lease.

In December 2021, Cloudbreak/Alianza completed a reconnaissance programme at the Klondike Property with an aim to help define drill targets at the West Graben Fault and East Graben Fault targets.

The reconnaissance programme included mapping, stream sediment sampling and rock sampling.

Following the activity, Cloudbreak/Alianza expanded the two targets’ footprint and also identified a new target, named Northeast Fault, at the Klondike Property.