DENVER--(BUSINESS WIRE)--Solitario Exploration & Royalty Corp. (“Solitario;” NYSE MKT: XPL; TSX: SLR) is pleased to announce that it, together with its funding joint venture partner, Compañia Minera Milpo S.A.A. (“Milpo”), significantly increased joint venture property holdings in northern Peru by acquiring 6,500 hectares (16,055 acres) of new mineral concessions in early January 2017. The acquired property fills an ownership gap in our consolidated claim position held by the Bongará and Chambara joint ventures, both of which are mutually owned by Solitario and Milpo (see attached map).
The newly acquired concessions were previously held by a third party for approximately the past 20 years, but the claims recently expired allowing Milpo/Solitario to acquire the property the first day it became available for staking. With these new mineral rights, the joint ventures have secured the most attractive geologic terrain for the future expansion of zinc mineralization outside of our core Bongará claim group.
The attached map shows the position of the existing Bongará joint venture claims, the Chambara claims and the new Chambara claims. Although the Bongará and Chambara joint venture agreements with Milpo are similar (see “Terms of the Bongará and Chambara Joint Ventures” below), current participating interests differ significantly with Solitario owning 39% of the Bongará joint venture and 85% of the Chambara joint venture (Milpo 61% and 15%, respectively).
Chris Herald, President and CEO of Solitario, stated, “We are excited about the acquisition of these highly prospective mineral rights. We believe this large newly acquired area has excellent exploration potential as it is squarely on trend with Bongará mineralization and known mineralized structures and favorable stratigraphy.”
This release has been reviewed for accuracy by Walter Hunt, Chief Operating Officer of Solitario, a “qualified person” as that term is defined in NI 43-101.
Terms of the Bongará and Chambara Joint Ventures
Currently, Solitario owns a 39% interest in the Bongará project concessions and an 85% interest in the contiguous Chambara project concessions. Peruvian mining company Milpo owns 61% and 15% of these two projects, respectively. Since inception of both of these joint ventures, the Brazilian conglomerate Votorantim and its subsidiary, Milpo, have funded 100% of project expenditures. Milpo can earn a 70% interest in the Bongará project by continuing to fund all project expenditures1 and committing to place the project into production based upon a positive feasibility study. After earning 70%, and at the request of Solitario, Milpo has further agreed to finance Solitario's 30% participating interest for construction. Solitario will repay the loan facility through 50% of its net cash flow distributions for production on Bongará joint venture properties. If Milpo earns a 70% interest in the Chambara JV and funds construction, then Solitario would repay any financing of Chambara initial capital construction from 80% of its net cash flow distributions.
1 except the PEA that is currently in preparation and funded by Solitario
About Solitario
Solitario is an exploration and royalty company traded on the NYSE MKT (“XPL”) and on the Toronto Stock Exchange (“SLR”). Solitario has a joint venture with Milpo on its high-grade Bongará zinc project and its Chambara exploration project in Peru and a 9.97% equity interest in Vendetta Mining. Solitario’s Management and Directors hold approximately 7.6% (excluding options) of the Company’s 38.7 million shares outstanding. Solitario’s cash balance and marketable securities currently stand at approximately US$17 million. Additional information about Solitario is available online at www.solitarioxr.com.
