Close Btn

Newsletter & press release sign up

Royal Road Minerals

Royal road Minerals enters into option agreement to acquire the La Redención Gold Project in Nariño Province, Colombia

New mines for a new world

News

Royal road Minerals enters into option agreement to acquire the La Redención Gold Project in Nariño Province, Colombia

April 4, 2016 – Toronto, Ontario: Royal Road Minerals Limited (TSXV:RYR) (“Royal Road Minerals” or the “Company”), a gold focused mineral exploration and development company, is pleased to announce that it has entered into an option agreement (the “Option Agreement”) effective as of March 31, 2016, with Mesias Oliver Acosta Benavides, Euberto Ernesto Calderón and Jesús Yerobi Santander (collectively, the “Optionors”) to acquire 100% of the La Redención gold project, which is located approximately 450 meters north of the license boundary of the Company’s La Golondrina gold project in the Nariño Province of southern Colombia.

The La Redención gold project is a locally owned and operated vein-hosted gold mine held under a 25 hectare mining license. The project has not yet been drill-tested but exposure in underground development reveals that the mineralized system has the same geological characteristics to the Company’s neighboring La Golondrina gold project. Where exposed, gold mineralization at La Redención is most similar to the “vein-zone” style of gold mineralization at La Golondrina and comprises three or more shallow-dipping parallel veins with subsidiary linking vein structures extending over widths that exceed one meter and in some cases dip off into the floor or roof of underground development (see Figure 1). Mineralized bodies at Mina La Redención occur some 700 meters vertically below and just 450 meters along strike to the north from veins and vein-zones at La Golondrina, suggesting that they are part of the same gold mineralizing system.

4529ab31-a5f2-4244-bd61-c1aade873cba.jpg

“We are excited about this new partnership and about the potential at Mina La Redención” said Tim Coughlin, Royal Road’s President and CEO. He added “It is our view that gold mineralization at La Redención is an exposed extension of the same high-grade gold system at La Golondrina, testifying to the lateral and vertical extent of vein and hornfels-hosted gold mineralization in this area and thus to its plus million ounce potential. This agreement is another step in our strategy of working with local gold producers and communities in the La Llanada region to expand resources, modernize operations and ensure inclusive, sustainable and low-impact exploration and gold mining”.

Option Agreement

The following is a summary of principal terms of the Option Agreement:

The Company has the option to acquire a 100% undivided interest in the La Redención project

In order to exercise the Option, the Company must:

  • Assist the Optionors to a maximum cost of US $20,000 to complete all ongoing regulatory work to a high level and acquire the additional required approvals for exploration activities on the license area
    • On acquisition of regulatory approvals, pay to the Optionors the aggregate sum of US $20,000
    • Pay to the Optionors the aggregate sum of US $25,000 on or before the date that the Company first commences drilling on the La Redención project
    • Pay to the Optionors the aggregate sum of US $30,000, payable in three equal installments of US $10,000 on the first, second and third anniversary dates of regulatory approval
    • Complete a minimum of 750 meters of drilling at La Redención on or before the third anniversary of the effective date of regulatory approvals

After making these payments and completing this exploration work, the Company may, prior to the third anniversary of the date of regulatory approvals, give a notice to the Optionors of its intention to complete a feasibility study. If, after completing the feasibility study, the Company determines that the development of a mine is justified at such time, the Company may exercise the option and, thereupon, it will acquire a 100% interest in the La Redención project (subject to the royalty described below). In the alternative, the Company may, at such time, elect to defer making a production decision and exercising its option for a period of up to five years, and instead pay to the Optionors the aggregate sum of US $10,000 per annum during such deferral period

Upon any exercise by the Company of the option, the Optionors will have the right to receive a 20% net profit royalty to be paid once payback of all capital invested to explore, develop and construct the operation has been made

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Cautionary statement:

This news release may contain certain information that constitutes forward-looking statements. Forward-looking statements are frequently characterized by words such as “plan,” “expect,” “project,” “intend,” “believe,” “anticipate” and other similar words, or statements that certain events or conditions “may” or “will” occur and include statements regarding the Option Agreement. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. These factors include the inherent risks involved in the hiring and retention of directors and officers, exploration and development of mineral properties, mine site planning and development, the uncertainties involved in interpreting drilling results and other geological data, fluctuating metal prices, permitting and licensing and other factors described above and in the Company’s most recent annual information form under the heading “Risk Factors”, which has been filed electronically by means of the Canadian Securities Administrators’ website located at www.sedar.com. The Company disclaims any obligation to update or revise any forward-looking statements if circumstances or management’s estimates or opinions should change. The reader is cautioned not to place undue reliance on forward-looking statements.

For further information please contact:

Dr. Tim Coughlin President and Chief Executive Officer USA-Canada toll free 1800 6389205 +44 (0)1534 887166 +44 (0)7797 742800 info@royalroadminerals.com