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Solitario Signs Letter Of Intent With Hochschild Mining On Its Pachuca Norte Silver-Gold Project, Mexico

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.

Stock quotes in this article: XPL 

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