With today announcement, Earn-in Agreement on Donovan 2 Copper-Gold Project Executed between Capstone Mining Corp and Alien Metals. We took the opportunity to speak with Bill today to let holders hear his views and thoughts on today update.
The company announced that it has executed an Earn-in Agreement (“Agreement”) with Capstone Mining Corp (Capstone) (TSX: CS) over its Donovan 2 Copper-Gold project (the “Project”) in Mexico (Transaction). Pursuant to the Agreement, Capstone has the ability to acquire up to an 80% interest in Donovan 2 by sole funding the Project up to the completion of a Prefeasibility Study.
– Capstone can earn an initial 65% interest in Donovan 2 through a combination of cash payments and committed expenditure, consisting of:
o US$290,000 in cash payments to Alien over three years; and
o US$3,600,000 in valid exploration expenditure over three years (including US$150,000 being incurred by 31 December 2020)
– Capstone can increase their interest from 65% to 75% by making a further cash payment of US$200,000 and funding the costs associated with a Preliminary Economic Assessment (PEA)
– Following delivery of the PEA, in the event Alien elects not to contribute pro-rata to its 25% interest, Capstone Mining has the ability to sole-fund the costs of a Prefeasibility Study (PFS) to earn an additional 5% in Donovan 2 (bringing their holding to 80% and Alien 20%)
– Thereafter, each party will fund their pro-rata interest in the Project or dilute according to industry standard mechanisms. In the event Alien dilutes to below 5%, it’s interest will convert to a 2% Royalty
– The Transaction with Capstone delivers the potential for immediate advancement of the Donovan 2 Copper-Gold project while allowing Alien to focus exploration activities across its project portfolio
TPI provides its latest research note on Alien Metals Limited (UFO.L)
Further to the RNS dated 9 September 2020, Alien and Capstone had entered into an Exclusivity Agreement whereby Capstone, a mid-tier North American mining company, secured a 45-day period to undertake due diligence to their satisfaction with the aim of the parties executing a joint venture agreement for Capstone to acquire an interest in Donovan 2.
Bill Brodie Good, CEO & Technical Director of Alien Metals, commented:
“The Company is extremely pleased to have executed the Agreement with Capstone Mining. This transaction sees the potential for considerable expenditure to be invested into Donovan 2 over the next few years as the project progresses through to feasibility studies. I thank the team at Capstone Mining for their efforts over the last few months and I look forward to working with them.
“Importantly, the transaction is in line with the Company’s model of unlocking value in its project portfolio; with Capstone overseeing exploration at Donovan 2, the Company’s management team can focus its exploration efforts at Hamersley and Elizabeth Hill in Western Australia and commence maiden drilling at Los Campos and San Celso.”
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