A 6,000-metre first-phase drill program in 2012 is being funded by Teck Peru S.A., a wholly owned subsidiary of Teck Resources Limited, the company said in a press release.
Under the terms of an option agreement, Teck must spend $30 million on exploration (or spend $10 million on exploration plus deliver a prefeasibility study) to earn a 75% interest in the property.
The $2-million drill program in 2012 is mandatory under the option agreement; funding of further work is solely at the discretion of Teck.
Prior to entering into the option agreement with Teck, Strait Gold applied to the Ministry for a permit to conduct up to 10,000 metres of core drilling which was approved by the Ministry in February 2012.
Subsequent to entering into the Teck agreement the company revised its drill plan to 23,000 metres as laid out by a joint technical committee of Strait Gold and Teck.
“We have a permit in hand for 10,000 metres of drilling, but we may want to keep the drills turning after Teck’s mandatory program is completed,” said Strait Gold President Jim Borland. “Having an expanded permit for 23,000 metres will allow us to continue uninterrupted.”
The expanded drill plan is a modification of the already-approved drill plan, so the company does not anticipate undue regulatory delays.
In the meantime, Strait Gold can and may start drilling an initial four holes totalling 1,600 metres under the existing permit that coincide with holes laid out in the modified plan.
Drilling planned for 2012 will test the property’s porphyry potential.
A community agreement, required under Peruvian law prior to drilling, has been in place at Alicia since February 2010 and was recently renewed until February 2014.
Strait Gold Corporation is a Canadian mineral exploration company active solely in Peru since 2003 and listed on the TSX Venture Exchange.
It holds a 55% interest with an option to increase that interest to 100% in the Alicia copper-gold property which lies within the Andahuaylas-Yauri porphyry-skarn copper belt approximately 500 km southeast of Lima.
Strait Gold has granted Teck Peru S.A., a wholly owned subsidiary of Teck Resources Limited, an option to earn up to a 75% interest in the property by, among other things, spending $30 million on exploration or by spending $10 million on exploration and delivering a pre-feasibility study.
The company also holds an option to earn a 100% interest in the Caribe copper-molybdenum property approximately 80 km west of Alicia and holds a 100% interest in both the Letra Rumi South base metals property and the Culebrilla precious metals property approximately 250 km north of Lima.
Strait Gold continuously reviews exploration opportunities in Peru and is actively
seeking additional projects.