Photo by: Bloomberg
PERTH (miningweekly.com) – Junior explorer Mining Group has signed a production agreement over the El Roble copper project, in Chile, allowing the company access to the Panga copper mine.
The production agreement allowed Mining Group to extract 5 000 t/m of ore from the historic Panga mine, subject to a number of conditions, including a monthly payment of $2 000.
The first $200 000 of revenue generated from the operation would also be subject to a 10% royalty, and every subsequent dollar of revenue over the $200 000/m limit would be subject to a 5% royalty.
Royalty payments would be made in lieu of the minimum monthly payment when royalty payments exceed $2 000/m, with Mining Group being held liable for the minimum monthly payments from January next year.
Mining Group MD Zeffron Reeves said that the production agreement marked a significant milestone for the company in moving forward to achieve its short-term goal of starting small-scale production at El Roble.
“The Panga mine has been historically mined with a number of small stopes mapped from underground and numerous workings mapped at surface along its 3 km strike extent.
“This agreement gives us access to 1 100 m of strike, where there is around 220 m of adit development and open ore faces exposed at the bottom of the mine.”
Reeves said that the immediate mine area had the potential to host numerous high-grade copper- and gold-bearing ore shoots.
“Now we have exclusive access to Panga, we will commit resources to fully assessing the area. This will include a small drill programme targeting below the mined-out historic stopes, which will assist the company in delineating economic widths of high-grade copper mineralisation and making a decision on whether the start of small-scale mining at Panga is a feasible option.”