EMX Royalty Corporation has announced the execution, by its wholly-owned subsidiary Bronco Creek Exploration Inc., of an option to purchase agreement for the Mesa Well property (the “Project”) to Intrepid Metals Corp. The Agreement provides EMX with cash and share payments during Intrepid’s earn-in period, and upon earn-in, a retained 2% net smelter return (“NSR”) royalty interest, annual advance royalty payments, and certain milestone payments.
The Mesa Well Project is located in south-central Arizona’s porphyry copper belt, approximately 100 kilometers northeast of Tucson. The principal target is a structurally dismembered and rotated porphyry copper-molybdenum system concealed beneath strongly tilted, post-mineral cover rocks. There are additional targets of skarn/replacement mineralization, also beneath cover rocks.
The Agreement with Intrepid – reports a press release – is an example of EMX’s execution of the royalty generation aspect of its business model. The Company acquired Mesa Well at minimal cost in a premier porphyry copper belt, and has now partnered the Project for further in-the-ground exploration investment, pre-production payments, and a retained NSR royalty interest, all at no additional cost to EMX.
Intrepid can earn 100% interest in the Project before the fifth anniversary of the Agreement by: (a) making execution and staged option payments totaling $350,000, (b) delivering 600,000 common shares of Intrepid, and (c) incurring $2,000,000 in exploration expenditures. After earn-in, EMX will retain a 2% NSR royalty interest on the Project and will receive certain annual advance royalty (“AAR”) payments.
Additionally, Intrepid has agreed to make payments to EMX at certain Project milestones: (a) $200,000 upon completion of a Preliminary Economic Assessment; (b) $500,000 upon completion of a Prefeasibility Study; and (c) $1,000,000 upon completion of a Feasibility Study.