Mogotes Metals has signed an option-to-joint-venture (JV) agreement with a Rio Tinto subsidiary, the Kennecott Exploration Company, for the Copper Cliff Project in Montana, US, covering both patented and unpatented mining claims.
The project is situated in the Garnet Range, 13km south-east of Potomac.
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It is positioned 55km north-west of the Philipsburg silver-lead-zinc skarn and 115km from the significant Butte copper-molybdenum (gold-silver) porphyry historic mining areas.
The project encompasses the Copper Cliff mining district, which intermittently operated from the 1890s to the 1940s, producing an estimated 110,000lb of copper, 260oz of gold and 570oz of silver from supergene mineralisation.
The historic Copper Cliff mining district hosts a gold-copper porphyry project identified by Kennecott/Rio Tinto in 2006.
Since exploration halted in 2017, there is considerable opportunity to expand the porphyry mineralisation footprint with further drilling.
Mogotes Metals has delineated an exploration target using current drill intercepts, aiming for a vertical reach of 1,000m and an estimated surface area of 450m × 300m for future drilling activities.
Under the agreement, Mogotes can acquire up to a 60% interest by funding exploration activities, starting with a minimum of $4m (C$5.49m) in the first year.
By the third year, the company must invest an additional $12m to earn a 51% stake, with 70% of the total $16m focused on drilling.
To increase its share to 60%, Mogotes must spend an extra $40m by the sixth year, totalling $56m.
Once Mogotes achieves its earn-in, a JV will be established, reflecting the earned interests – potentially 49% for Kennecott and 51% for Mogotes at the 51% earn-in level, or 40% for Kennecott and 60% for Mogotes if the full earn-in is completed.
Mogotes Metals utilised Rio Tinto’s drill database, consisting of 25 holes covering 32,000m, to assess gold-copper intercepts.
Mogotes Metals CEO Allen Sabet said: “This option with Rio Tinto allows us to leverage the extensive discovery work done by one of the greatest mining companies in the world, apply our technical know-how and knowledge in copper porphyry exploration to make further discoveries in the district, and explore to expand the known mineralisation footprint at the main Copper Cliffs discovery.
“We are very excited to enter into this option which contemplates Mogotes earning up to [a] 60% stake in the project, with all consideration for the option being in expenditure on project-related work.”
