The Caspiche Project is located in the Maricunga Belt of Chile, between Barrick and Kinross Gold’s Cerro Casale gold-copper deposit 10 kilometres to the south and Kinross Gold’s Maricunga Mine 15 kilometres to the north. Hocschild’s Volcan gold deposit lies 35 kilometres north northeast of Caspiche.
The endowments for these deposits shown below demonstrate the potential of the area to host world class orebodies and recent success marks the Maricunga as an emerging world class gold province;
Exeter fulfilled the total expenditure and drilling requirements for the full term of the option agreement for Caspiche. It exercised the option to purchase 100% ownership of the Caspiche property in early 2011. This exercise agreement provides for an extension of the required time line to production to 15 years, adds additional tenure to the package and details the 3% net smelter royalty due to Anglo from production. Advance royalty payments of US$250,000 per year to March 2021 and thence US$1 million per year to March 2026 are payable and terminate upon commencement of commercial production. The Caspiche mineral properties are also subject to a further 0.08% NSR payable to a private entity.
The Company has a lease agreement with the Chilean Government for the surface rights that correspond to its initial mineral rights in the Caspiche area and in Q3 2016 the lease was renewed for a further 10 year period at an annual rate of approximately US$40,000. On June 10, 2013 the Company announced that its application for surface rights at Caspiche had been granted by the Chilean Government; this easement extends this area to cover most of its additional tenements as well as areas that may be required for potential development of a mine at Caspiche. In order to maintain surface rights, which are valid for 25 years, the Company was required to make total payments of 158,876 Unidades de Fomento (UF)*, an equivalent of approximately US$6.5 million of which US$3.0 million was paid to December 31, 2016.
During 2016, the Company negotiated a reduction in the area covered by the easement with the Chilean Government thereby reducing the cost of the easement. As a result, the Company is now required to make total payments of 11,995 UF, an equivalent of approximately US$474,000 of which US$59,000 has been paid to December 31, 2016. Seven annual payments of approximately US$59,000 remain payable.
The Caspiche property has a combined area of 1262 hectares, with control across a total property holding in the area for Exeter of 7,616 hectares over 6 times the original land package acquired from Anglo.