Auryn Resources Inc. is pleased to announce that it has acquired the option to earn a 100% interest in the Baños del Indio gold project located 10 km to the north of Auryn's Huilacollo project with known gold mineralization. The project is located in the Tacna province of Southern Peru. The Banos Del Indio gold project hosts one of the largest untested alteration systems in the Andes and is located within a prominent epithermal belt.
Shawn Wallace, President and CEO commented, "Our pursuit of acquisitions in Peru has been largely predicated on our technical teams vast knowledge and experience in the country. Banos Del Indio represents an exceptional exploration opportunity that our technical team has been aware of and desired for several years."
Mr. Wallace further stated, "With these acquisitions in Peru and the others that we have recently completed, our goal of building a diverse portfolio with high grade exploration targets in Canada and some of the largest scalable oxide exploration targets is being achieved. We look forward to aggressively executing capital efficient exploration programs including substantive drill programs over the next few years."
Baños Del Indio Property
The Baños del Indio epithermal property is comprised of 7,534 hectares of well-developed high-level steam heated epithermal style alteration and is considered by Auryn to be one of the largest untested epithermal alteration centers in Peru (see Figure 3). Baños del Indio shares many similarities with the La Coipa mine complex in northern Chile where economic mineralization is principally located beneath similar high-level steam heated epithermal alteration. Initial exploration to define drill targets will focus on structural mapping, multi-spectral analysis to identify high temperature clays, volumetric sampling and induced polarization geophysical surveys.
Antonio Arribas, Director of Auryn, stated, "Banos del Indio is one of the largest and least explored alteration anomalies that I am familiar with in the region which I have been aware of for several years. The property is situated in the perfect location for significant epithermal discoveries in Southern Peru."
The Company acquired the rights to the Baños del Indio property through an option agreement with a local Peruvian company, Exploandes S.A.C (the "Banos Option"). Under the Baños Option, the Company may acquire a 100% interest, subject to a net smelter return royalty (NSR), through a combination of work expenditures and cash payments (all dollar amounts are in USD) as detailed in the table below:
The Banos del Indio NSR is 3.0% with 50% (being 1.5%) buyable for $6,000,000. In the event the Company does not complete a feasibility study within 3 years of exercising the option, an escalating advanced royalty starting at $200,000 per annum shall become payable. The total amount of the advanced royalty is capped at $1.5 million.
The Company is also obligated to pay a production bonus of $2,500,000 upon initial commercial production.