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The Company

Business of the Company

The Company is engaged in the business of mineral exploration and the acquisition of mineral property assets in Mexico. Its objective is to locate and develop economic precious and base metal properties of merit. Further to this objective, the Company entered into an option agreement, effective May 7, 2019, pursuant to which it was granted the option to acquire a 75% interest in the Palos Verdes Property, which constitutes the material property of the Company.

Over the next 12 to 18 months, the Company intends to complete its recommended exploration program on the Palos Verdes Property and its initial commitments thereon.

Acquisition of Mineral Projects

The Company has entered into two property option agreements: (1) the ProDeMin Option Agreement whereby the Company was granted the option to acquire a 75% interest in the Palos Verdes Property; (2) and the Cascabel Option Agreement whereby the Company was granted the option to acquire a 100% interest in the Los Pavitos Property.

The ProDeMin Option Agreement and the Palos Verdes Property

On May 7, 2019, the Company entered an option agreement with ProDeMin, pursuant to which it was granted the option to acquire a 75% interest in the Palos Verdes Property.

With respect to the ProDeMin Option Agreement, the Company, was granted the option to acquire a 75% interest in the Palos Verdes Property in consideration for the fulfilment of certain conditions over a period of five (5) years, namely:

  • The payment to ProDeMin of an amount of USD $25,000 (completed);
  • The issuance to ProDeMin of 2,000,000 units with a fair market value of $0.05 per unit, with each unit being comprised of one Common Share and one common share purchase warrant of the common share purchase warrants may be exercised at a price of $0.10 per share, expiring of the fifth anniversary of the date of issuance of such warrants (completed);
  • The issuance of 500,000 Common Shares with a fair value of $0.05 per share for a total of $25,000 to ProDeMin as payment for work completed on the Palos Verdes Property (completed);
  • By making payments of up to USD $240,000 over a period of 42 months;
  • Over a five-year period from the date of the ProDeMin Option Agreement, the Company must incur a total USD $1,500,000 in exploration expenditures on the Palos Verdes Property, subject to (i) a minimum of USD $100,000 in exploration expenditures during the first two years following the date of the ProDeMin Option Agreement; (ii) a minimum of USD $100,000 in exploration expenditures for each of the third and fourth year following the date of the ProDeMin Option Agreement; and (iii) a minimum of USD $500,000 in exploration expenditures in the fifth year following the date of the ProDeMin Option Agreement. As such, under the ProDeMin Option Agreement, the Company is required to make minimum yearly exploration expenditures which total in the aggregate USD $800,000. The balance of USD $700,000 in exploration expenditures to be incurred by the Company to meet the total USD $1,500,000 exploration expenditures requirement may be incurred at the Company’s discretion in any given year over a period of five years following the date of the ProDeMin Option Agreement. During the term of the ProDeMin Option Agreement, in addition to the exploration expenditures commitments, the Company must also pay all fees and duties required to maintain the mineral concessions forming part of the Palos Verdes Property in good standing.
  • The payment of USD $25,000 to ProDeMin for each of the third and fourth year following the date of the ProDeMin Option Agreement; and
  • The issuance to ProDeMin, or as directed by ProDeMin, of 2,000,000 Common Shares in the fifth year following the date of the ProDeMin Option Agreement, and also paying during such period all fees and duties required to maintain the mineral concession in good standing
The Cascabel Option Agreement

With respect to the Cascabel Option Agreement, the Company was granted the option to acquire a 100% interest in the Los Pavitos Property in consideration for the fulfilment of certain conditions, described below:

  • The issuance to Cascabel of 2,000,000 units with a fair market value of $0.05 per unit, with each unit being comprised of one Common Share and one common share purchase warrant of the Company The common share purchase warrants may be exercised at a price of $0.10 per share, expiring of the fifth anniversary of the date of issuance of such warrants (completed);
  • The payment to the Mexican authorities of an amount of USD$27,489, as instructed by Cascabel, in relation to taxes owed for the 2019 fiscal year (to be completed);
  • Over a five-year period from the date of the Cascabel Option Agreement, the Company must incur a total USD $1,500,000 in exploration expenditures on the Los Pavitos Property, subject to (i) a minimum of USD $75,000 in exploration expenditures during the first two years following the date of the Cascabel Option Agreement; (ii) a minimum of USD $100,000 in exploration expenditures for each of the third and fourth year following the date of the Cascabel Option Agreement; and (iii) a minimum of USD $500,000 in exploration expenditures in the fifth year following the date of the Cascabel Option Agreement. As such, under the Cascabel Option Agreement, the Company is required to make minimum yearly exploration expenditures which total in the aggregate USD $775,000. The balance of USD $725,000 in exploration expenditures to be incurred by the Company to meet the total USD $1,500,000 exploration expenditures requirement may be incurred at the Company’s discretion in any given year over a period of five years following the date of the Cascabel Option Agreement. During the term of the Cascabel Option Agreement, in addition to the exploration expenditures commitments, the Company must also pay all fees and duties required to maintain the mineral concessions forming part of the Los Pavitos Property in good standing.
  • Within the first two years of the date of the Cascabel Option Agreement, the Company shall deliver a technical report to NI 43-101 standards;
  • The Payment of USD $100,000 to Cascabel or each of the third and fourth year following the date of the Cascabel Option Agreement;
  • The issuance to Cascabel, or as directed by Cascabel, of 2,000,000 Common Shares and the payment of USD $300,000 to Cascabel in the fifth year following the date of the Cascabel Option Agreement;
  • Performing sufficient assessment work to satisfy the applicable government work commitment costs on the Los Pavitos Property through the end of each tax period;