Capstone Mining has entered into an option agreement with Sociedad Química y Minera de Chile (SQM) to earn up to 70% of a property, Project Providencia. The initial option is on 350,000 hectares in Chile's II Region. This would be reduced overtime to a maximum of 50,000 hectares in case a joint venture is formed.
The Property is located 50km east of the city of Taltal, approximately half way between Capstone's Santo Domingo Project and Anglo American's Mantos Blancos copper mine. It rests at a mean elevation of 1,800m above sea level, with mostly gentle topography and it benefits from the Pan-American Highway cutting through the centre of the block.
Capstone paid SQM USD 1M upon signing. It will commission a high resolution, combined magnetic and radiometric airborne survey over the block. Both surveys will be useful in providing a basic geological framework from which to start exploration; however, the magnetic survey will be particularly useful in identifying anomalies of interest since the principal target is a magnetite rich IOCG deposit, similar to Santo Domingo.
Capstone will be the operator of the project and may earn up to a 70% interest in the Property over 7.5 years in incremental steps by spending on exploration and land holding costs. Three options may be exercised at Capstone's sole discretion. At any time during the term of the agreement, Capstone has the right to withdraw from the project, whereby the agreement will terminate and management of the project will return to SQM.