GSP Resource Corp., a mineral exploration company, takes pleasure in announcing that it has signed a letter of intent (LOI) with S. Gaye Richards and Richard John Billingsley (the Vendors).
Image Credit: Alf Manciagli/Shutterstock.com
The LOI will allow both Vendors and GSP Resource to discuss and settle the terms and conditions of a definitive option agreement that will offer an option to GSP Resource to stake a complete interest in the Vendor’s interest, right, and title both in and to the mineral claims, compromising the “Alwin Project”—the mineral exploration and development project.
Situated in the Kamloops Mining Division, the Alwin Project lies 18 km west of Logan Lake in British Columbia. It includes the previously producing Alwin Copper Mine and is situated immediately west of the Valley porphyry copper-molybdenum-silver ore body of Teck Resources.
The Alwin Project is located in the Guichon Batholith, within 3 km of Highland Valley Copper open pit of Teck Resources. Nearby properties contain mineralization that does not indicate any mineralization to be potentially hosted on the Alwin Project.
Previous resource estimates, described in this analysis, exist on the Alwin property and is situated in a mineralized structure that has been the subject of the production of historic mine.
The project spanning 575.72 hectares has a number of targets discovered in earlier IP surveys, drilling, and soil sampling performed during the 2005–2008 period.
At the Alwin mine, large-scale production stopped during the period of low prices of copper in 1982 and the latest prominent exploration program stopped during the global financial crisis between 2008 and 2009.
We are pleased to complement our Olivine Mountain project with the Alwin Copper-Gold-Silver project. With the addition of Alwin, GSP will have established a strong footprint of catalyst-rich projects in Southwestern British Columbia. We believe that the Alwin Project represents significant upside for further discovery.
Simon Dyakowski, President and CEO, GSP Resource Corp.
Alwin Project History
At the Alwin, a number of mining syndicates and companies have performed exploration and mining programs during the 1967–2008. In the past, operators have extracted approximately 230,000 tons of ore, grading about 1.5% copper.
Within the project, almost 2700 m of underground tunneling has been established, such as 649 diamond drill holes, completing a total of 34,500 m. Furthermore, trenching, geological, and geophysics mapping on the Alwin property has been well documented.
Historical Resource Estimates
John R. Kerr, P. Eng has prepared a brief report on the Alwin Property, Kamloops Mining Division in British Columbia. The report is dated November 15th, 2006 and can be accessed on www.sedar.com under the San Marco Resources profile (the “Report”).
This Report revealed that Sandwell & Company Ltd. and Bacon & Crowhurst Ltd. had calculated a previous resource estimate between 1969 and 1970. This previous resource estimate was not produced through Standards of Disclosure for Mineral Projects as defined in National Instrument 43-101.
As stated below, GSP Resource is not considering the historical resource estimate as current, and additional drilling is required to upgrade this resource estimate.
A brief outline of this previous resource estimate reported 955,000 tons grading 11.7 g/t silver and 2.51% copper in total. This calculation was based on the drill programs performed between 1967 and 1969 (200 holes).
Moreover, the Report revealed that mining performed during the 1972–1981 period accounted for 240,000 tons grading 1.5% copper. Following the last period of mining performed in 1981, Dekalb Mining Corp. reported that a previous resource estimate was concluded in 1982.
The 1982 summation of this calculation reported a total of 390,000 tons grading 2.50% copper that recently existed in the ground following the historical mining events. This calculation was based on drill outcomes from the 1967–1981 drill programs.
As stated above, GSP Resource is not taking the estimate into consideration as current and additional drilling are required in order to upgrade the previous resource estimate.
GSP Resource assumes that the previous resource estimates are applicable to perform exploration activities on the Alwin Project. Moreover, GSP Resource is not considering this previous resource estimates as present mineral resources.
Furthermore, the qualified person responsible for reviewing the previous resource estimates on behalf of the GSP Resource, have not carried out any major work to define the previous resource estimates as a present mineral resource. GSP Resource has not verified any of the historical data on which the previous estimates are based on.
Terms of the Proposed Transaction
Under the LOI terms, GSP Resource may stake a complete interest in the Alwin Project by making specific staged cash payments and also through share payments of common shares in the capital of GSP Resource to the Vendors.
- Payable cash:
- CAD$25,000 after receiving TSX Venture Exchange approval of the Option Agreement (the Approval Date)
- CAD$25,000 on or before the 1st anniversary of the Approval Date
- CAD$25,000 on or before the 2nd anniversary of the Approval Date
- CAD$50,000 on or before the 3rd anniversary of the Approval Date
- CAD$50,000 on or before the 4th anniversary of the Approval Date
- CAD$75,000 on or before the 5th anniversary of the Approval Date
- Common shares of GSP Resource include:
- 200,000 on the Approval Date
- 200,000 on or before the 1st anniversary of the Approval Date
- 300,000 on or before the 2nd anniversary of the Approval Date
- 400,000 on or before the 3rd anniversary of the Approval Date
- 500,000 on or before the 4th anniversary of the Approval Date;
- 900,000 on or before the 5th anniversary of the Approval Date
- 2,000,000 on or before the earlier of a bankable feasibility study and the 8th anniversary of the Approval Date.
- Gross Smelter Returns Royalty (GSR Royalty):
- A GSR Royalty of 1.8% to the Vendors with option to GSP Resource to repurchase 0.8% GSR Royalty on or before the 1st anniversary of the initiation of commercial production for CAD$1.5 million; this will leave the Vendors with a GSR Royalty of 1%.
More details concerning the proposed transaction with the Vendors will be revealed in a detailed news release if, and when, all the parties sign the Option Agreement.