Solitario Exploration & Royalty Corp. (“Solitario;” NYSE MKT: XPL; TSX: SLR) is pleased to announce that it has signed a binding Letter of Intent (“LOI”) with Minera Hochschild México S.A. de C.V., a 100%-owned subsidiary of Hochschild Mining plc (LSE: HOCM.L / HOC LN) ("Hochschild"), on Solitario's Pachuca Norte silver-gold project in central Mexico. Solitario's 100%-owned Pachuca Norte project (formerly called “Pachuca Real”), encompasses approximately 19,000 hectares of mineral rights in and around the famed Pachuca silver-gold mining district. Historic production from the Pachuca district totals approximately 1.4 billion ounces of silver and over 7.0 million ounces of gold, making it one of the largest silver-gold districts in the world. A map of the project area can be viewed on Solitario's website at http://www.solitarioxr.com/art/PachucaNorte.pdf.
Terms of the Venture Agreement
Per the terms of the binding LOI, Hochschild can earn a 51% interest in the project by spending a total $10.0 million on exploration over a five-year period. The initial 12-month work program of $1.5 million is a firm commitment. The following table presents the entire five-year work commitment schedule:
|Exploration Expenditures and Due Dates||Amount||Aggregate Amount|
|12 months from signing - firm commitment||$||1,500,000||$1,500,000|
|18 months from signing - optional commitment||$||500,000||$2,000,000|
|36 months from signing - optional commitment||$||3,000,000||$5,000,000|
|60 months from signing - optional commitment||$||5,000,000||$10,000,000|
Hochschild will have the right to earn an additional 19% (total 70%) by completing a positive feasibility study for the project. Both parties are currently working on drafting and signing a definitive agreement. Upon signing a definitive agreement, expected in approximately 30 days, Hochschild will become project manager, and will have the right to terminate the agreement at any time following its firm initial work commitment.