Marcona Copper Project
Acquisition Details

The acquisition of the Marcona Copper Project involves two separate but simultaneous transactions. The first transaction involves the acquisition from Shougang of a 100% undivided working interest in Target Area 1 (approximately 3,969 ha) and from Rio Tinto of the assignment of the Option Agreement, between Rio Tinto and Shougang, whereby Rio Tinto has earned the right to acquire from Shougang a 57.5% interest in Target Area 1. To acquire these interests, Marcobre paid to Rio Tinto US$10,350,000 and Shougang US$7,650,000, on January 3, 2005 and has agreed to pay US$7,475,000 and US$5,525,000, respectively, on the second anniversary of the closing date.

The second transaction involves the acquisition of 100% of Rio Tinto's wholly-owned exploration property (approximately 28,930 ha) which lies immediately to the north and east of Target Area 1. To acquire this exploration property, Marcobre paid Rio Tinto US$2,500,000 on Jan 3, 2005.

Conditional Payments to Rio Tinto and Shougang of US$1,725,000 and US$1,275,000, respectively, will be payable when a decision to mine is made at any point in time in the future and if the then known resources of the Marcona Copper Project at such time demonstrate a contained metal content equal to or greater than 2.58 million tonnes of copper at a 0.3% Cu cut-off. An additional US$4,025,000 and US$2,975,000 will also be payable to Rio Tinto and Shougang in the event that the known resources of the Marcona Copper Project at such time demonstrate a contained metal content equal to or greater than 3.44 million tonnes of copper at a 0.3% Cu cut-off.


More info:.