Bighorn Metals has signed an exploration lease with an option to purchase agreement with MSM Resources for the Marietta Project in Mineral County, Nevada, US.
The arrangement gives the company exclusive exploration rights and an option to acquire full ownership of fee land and patented mining claims in the Silver Star Mining District within the Excelsior Mountains.
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Under the terms disclosed, Bighorn Metals will have an initial three-year exploration lease, with the possibility of two further three-year extensions.
During this period, the company can elect to exercise its option to purchase a 100% undivided interest in the property.
The company is required to make an initial lease payment of $100,000 (C$138,355) within 30 days of the agreement’s effective date, and annual minimum payments of $100,000 on each subsequent anniversary for up to three years.
These payments will not be credited towards the purchase price should Bighorn Metals exercise the purchase option.
Bighorn Metals must carry out exploration work totalling $50,000 within the first year, $100,000 by the second year and another $100,000 by the third year. This results in a required exploration expenditure of $250,000 during the initial term of the agreement.
Upon completion, MSM Resources will transfer a 100% undivided interest in the property free of encumbrances.
At closing, the property would be subject to a 2% production royalty on gross returns from minerals produced and sold from the site.
Bighorn Metals retains the option to buy back half of this royalty (1%) for $1m any time before commencement of commercial production.
The Marietta Project spans two parcels – the Marietta Patents and the Marietta Townsite – covering various sections in Township 5 North, Range 33 East.
The property comprises 12 patented lode mining claims and adjoining town site land within Mineral County.
