Aethon Minerals Corp. and AbraPlata Resource Corp. announced that they have entered into a binding letter agreement, whereby Aethon will have the exclusive right for a period of approximately five months to perform technical due diligence on AbraPlata's Diablillos silver-gold project in Argentina and negotiate with AbraPlata the terms of an option or other transaction whereby Aethon could acquire a 50% or greater interest in the Project. SSR Mining Inc. the original vendor of the Project to AbraPlata, has indicated its intention to support in principle the transactions to be negotiated by the parties pursuant to the Agreement.
The following is a summary of the principal terms of the Agreement: Aethon shall have the exclusive right until July 26, 2019, to complete its due diligence and negotiate the terms of, and enter into an option agreement with AbraPlata, pursuant to which Aethon can earn a 50% interest in the Project. In consideration for the Exclusivity Period, Aethon agrees to make an upfront payment of USD 50,000 to AbraPlata. By June 28, 2019, Period, Aethon will spend a minimum of USD 150,000 on expenditures in connection with a metallurgical testing program and other related test work to be carried out on the Project. If Aethon fulfills the above covenants and elects to exercise the Option by fulfilling the conditions, Aethon and AbraPlata shall negotiate the Option Agreement. On exercise of the Option, Aethon shall: issue to AbraPlata the number of Aethon common shares that would result in AbraPlata owning 9.9% of the then issued and outstanding Aethon shares; and subscribe, by way of a private placement, for a number of AbraPlata common shares that would result in Aethon owning 9.9% of the then issued and outstanding AbraPlata shares. The subscription price per AbraPlata share to be issued shall be equal to the greater of (i) the closing market price of AbraPlata on the day that the Option is exercised, and (ii) CAD 0.06. AbraPlata also has written assurances from SSRM that it will forbear from enforcing payment of an outstanding NSR royalty payment until October 31, 2019, provided no further event of default occurs, and that it would consider providing its agreement to delay property payments of USD 5 million and USD 7 million by up to four years under certain circumstances, including a merger of Aethon and AbraPlata, provided that it is satisfied with the definitive transaction terms and the provision of such security and other assurances as it determines to be necessary or desirable to protect and preserve its rights and interests, and it receives certain additional consideration. Aethon's first phase program on the Diablillos Project will have several objectives, including: A review of the drill data on the Oculto zone to determine how representative the sampling for metallurgical testing of the open pit resource silver dominant zone has been. This review will determine whether additional sampling/metallurgical testing is required for the open pit scenario and, if so, additional test-work will be completed; A review of additional epithermal style gold dominant resources within the Diablillos project area in preparation for future reconnaissance drilling; and A review of historical drill data to determine if higher grade silver and gold zones could potentially be exploited using underground mining methods.