The 10,000-ha property, which consists of four exploration licences and a 2,400-ha mining licence, is 425 km south of Quito.
Valerie can earn a half-interest in the property by paying US$100,000 in cash initially and spending US$4 million on the property over the next three years.
TVX will be granted warrants to buy up to 3 million shares of Valerie, including 750,000 shares at $2 after one year, 1 million shares at $3.50 after two years, and 1.25 million shares at $5 within three years.
The warrants will be exercisable only while the agreement with TVX remains in effect.
Valerie must spend at least US$500,000 within nine months of the closing of the agreement. It also must agree to spend at least 60% of the proceeds it receives from the warrants on property work.
If one of the companies decides to withdraw from the joint venture, that party’s interest will be diluted incrementally, eventually converting to a 20% carried interest until the completion of a bankable feasibility study or until exploration expenditures exceed US$20 million.
TVX has outlined three principal targets on Santa Barbara; these are known as Santa Barbara, El Hito and Napintza.
The most advanced of these is Santa Barbara, where soil sampling has identified an anomalous gold-copper showing measuring 1,200 by 1,500 metres. The core of the anomaly is defined by a contour (300 parts per billion gold and 500 parts per million copper) that measures 950 by 350 metres. A 650-metre-long bulldozer trench cut across the centre of the anomaly averaged 0.85 gram gold per tonne and 0.25% copper over its entire length. This included a 30-metre section of 1.2 grams gold. Valerie says the presence of intense surface alteration indicates that grades will improve with depth.
About 3 km to the east is El Hito, a porphyry copper target, where geochemical sampling has identified a copper-in-soil anomaly measuring 500 by 2,000 metres. The anomaly remains open to the north and south.
The core of the anomaly is defined by a 500-ppm contour that measures 750 by 300 metres. Hand trenching over the anomaly has returned assays up to 0.92% copper from heavily leached surface rocks.
At the Napintza target, 5 km south of the Santa Barbara showing, limited work has returned anomalous gold values of up to 1 gram per tonne. Anomalous zinc values in stream sediment and soil samples have defined a target area of about 1.5 sq. km.
The property is reached by a gravel road that ends just west of the Santa Barbara target, and electrical power and water are available.
TVX is building another gravel road across the Santa Barbara target area while, at the same time, conducting an induced-polarization survey over the region to define drill targets.
Valerie, which will be the project operator, has $12 million in cash and investments and 13.8 million shares on a fully diluted basis.
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