October 27 (SeeNews) - Canadian mineral exploration and development company Mundoro Capital has granted to Vale Canada an earn-in option for two additional copper and gold exploration licenses within Serbia's Timok Magmatic Complex, it said.
Pursuant to the Option, Vale can earn-in a 100% interest in the Savinac and Bacevica licenses, located in the southern portion of Timok which is one of the most prolific metallogenic domains in the Tethyan Belt, if it funds $2 million (1.7 million euro) expenditures over two years, Mundoro said in a statement last week.
According to a binding Memorandum of Understanding (MOU) signed by Mundoro and Vale, the option period can be extended by one year, with Vale commiting to cover additional $1 million in costs, Mundoro said.
Mundoro will be the operator of the projects during the option period and will receive an annual operator fee of $200,000, it noted.
Upon exercise of the option, Mundoro will retain a 2% Net Smelter Return (NSR) royalty on the projects, of which Vale will have an option to purchase up to 1% of the NSR royalty with payments tied to the gold price at that time.
After exercise of the option, Vale must make annual advance royalty payments to Mundoro of $200,000 per year until commercial production commencement. Moreover, Vale must make milestone payments to Mundoro totaling $9 million upon completion of four major milestones commencing with a resource estimate filing and ending with attainment of a development permit.
In October 2019, Mundoro granted to Vale an option to earn-in to the Sumrakovac, Osnic, Dubrava and Padina licences of the Timok Magmatic Complex. Under the agreement, Vale holds an option to earn, over two primary phases, up to a 75% interest in the projects by sole funding expenditures of up to $45 million.
($ = 0.84588 euro)