Grafton Resources Enters into Framework Agreement to Acquire Exclusive Option to Acquire 100% of the Alicahue Copper Project in Chile
Executive Summary
- Grafton Resources entered a Framework Agreement to obtain an option to acquire 100% of the Alicahue Copper Project in Chile.
- The company simultaneously announced a private‑placement financing (“Concurrent Financing”) of up to US$3 million at $0.50 per unit, each unit consisting of one common share and half a warrant (exercise price $0.80).
- The option requires US$4 million in exploration spend over four years, followed by a US$3 million exercise payment and various royalty/resource payments; the financing proceeds will fund these obligations and general corporate purposes.
Key Details
- Option Structure
- Five‑year term: first four years for mandatory exploration expenditures of US$4 M (minimum US$500k per 12‑month period).
- After meeting spend commitments, Grafton may exercise the option by paying US$3 M.
- Upon exercise, Vendor retains a 2.0% NSR royalty; Grafton can repurchase 1.0% of that royalty for US$5 M.
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Resource payment: US$5.00 per tonne Cu‑eq (cut‑off 0.2%) on measured, indicated and inferred resources defined under NI 43‑101 at construction decision.
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Cash & Share Consideration Timeline | Milestone | Cash Payment | Share Consideration | |-----------|--------------|---------------------| | Signing of Definitive Agreement | US$1,000 | Shares equal to US$100,000 | | First Anniversary | US$74,000 | Shares equal to US$75,000 | | Second Anniversary | US$75,000 | Shares equal to US$75,000 |
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Finder’s Fee – 7 % of the transaction value paid in common shares to an arm‑length finder.
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Concurrent Private Placement
- Minimum raise: US$2 M (4,000,000 units @ $0.50).
- Maximum raise: US$3 M (6,000,000 units @ $0.50).
- Each unit = 1 common share + ½ warrant; each full warrant allows purchase of one share at $0.80 for two years.
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Proceeds earmarked for: acquisition costs of the option, exploration spend, royalty/resource payments, working capital and general corporate purposes.
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Project Highlights
- Alicahue covers 3,500 ha in Chile’s Valparaíso Region at ~1,700 m altitude.
- High‑grade IOCG samples up to 6.34% Cu, 1.51 g/t Au, 59 g/t Ag; porphyry vectors with samples up to 2.26% Cu, 0.75 g/t Au.
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Historical stream‑sediment anomalies: up to 407 ppm Cu, 130 ppb Au.
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Regulatory & Compliance
- Option subject to CSE approval.
- Private placement requires CSE approval; insider participation qualifies as a related‑party transaction under MI 61‑101 but is exempt from valuation/approval thresholds.
Notable Quotes
“The Alicahue Copper Project represents an exciting new copper discovery opportunity in a world‑class jurisdiction… we are positioned to advance the project rapidly toward target definition and drilling.” – Campbell Smyth, Chairman
All forward‑looking statements are subject to risks and uncertainties detailed in the company’s cautionary statement.