Astra Exploration has secured an option agreement with Patagonia Gold, granting the former the potential to earn up to a 90% stake in the La Manchuria property in Argentina.
Spanning more than 5,600 hectares, the property is situated in the Deseado Massif geological region of Santa Cruz Province, known for its mineral prospects.
The La Manchuria property, owned by Patagonia Gold, has significant gold and silver resources.
Indicated mineral resources are reported at 474,000 tonnes (t), with a grade of 2.59 grams per tonne (g/t) of gold and 129g/t of silver. Additionally, inferred resources are estimated at 1.84 million tonnes, grading 1.3g/t of gold and 40g/t of silver.
Under the terms of the agreement, Astra can initially acquire an 80% interest in the Manchuria Project by committing to a structured payment plan.
This includes $150,000 in the first year, $350,000 in the second, $1.5m in the third and $1m in the fourth year of non-discretionary expenditures.
Once an 80% interest is secured, Astra has the option to increase its stake to 90% with a $5m cash payment to Patagonia by the end of year six, with a provision to extend this period.
Patagonia's interest will be carried forward until a 43-101 compliant resource report is published, indicating at least one million ounces of gold-equivalent in combined indicated and inferred categories.
Following the resource publication, both parties will contribute proportionally to future expenditures. Should either party's stake fall below 10%, it will automatically convert to a 1% net smelter royalty.
Astra will commence a 45-day due diligence period upon signing the agreement, which is contingent on approvals from the existing royalty holder and the Santa Cruz Provincial authorities for the agreed work plan between Astra and Patagonia.
Astra CEO Brian Miller said: “After reviewing many projects over the past several months, Manchuria stands out as an opportunity to make a significant high-grade discovery in a proven, yet underexplored land package.
“The grades are exceptional, preliminary metallurgy is favorable, and previous drilling was shallow and mostly focused on the current published resource. There is opportunity to expand the existing resource laterally near surface and along strike, but perhaps more important is the opportunity to discover high-grade feeder zones, which remain unexplored.
“Manchuria has multiple characteristics which support multi-million-ounce potential. With Pampa Paciencia, and now the addition of Manchuria, Astra continues to position itself as a premier explorer with a growing portfolio of high-quality precious metals projects in some of the most important mining jurisdictions in Latin America.”
