Prospero Silver, Hochschild Mining Sign Joint Venture Agreement to Advance Baborigame Project
VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 08/14/12 -- Prospero Silver Corp. (TSX VENTURE: PSL) ("Prospero" or the "Company") is pleased to announce that its wholly owned Mexican subsidiary Minera Fumarola, SA de CV, and underlying claimholder Compania Minera Terciario, SA de CV ("Terciario"), have signed a joint venture agreement with Minera Hochschild Mexico, SA de CV ("Hochschild", a subsidiary of Hochschild Mining, PLC), to advance Prospero's Baborigame project in southwestern Chihuahua State, Mexico.
Under the terms of the agreement, Minera Hochschild Mexico has the option to earn a 51% interest within 3 years by making total property expenditures of US$3.7M, including a minimum of 3,500 meters of drilling in Year 1, and total cash payments of US$1.9M. If Prospero elects not to participate in the 51%/49% joint venture at Year 4, Hochschild will have the option to earn an additional 14% with property expenditures of at least US$4M and a cash payment of US$200,000. If Prospero elects not to participate in the resulting 65%/35% joint venture, Hochschild will have the option to earn an additional 10% during years 5 and 6 by financing the project through to completion of a Definitive Feasibility Study, and making cash payments of US$200,000 (by the end of Year 5) and US$600,000 (by the end of Year 6). For the 75%/25% joint venture, each party will be responsible for contributing funding for the development of the property on a basis proportionate to their ownership percentages. If either party elects not to participate fully in funding, its ownership percentage will be diluted accordingly. Either party that dilutes below 10% ownership will revert to a 1% NSR (net smelter royalty).
The underlying claimholder, Terciario, will have the right to receive 50% of the cash payments referred to above and a separate 2.5% NSR. The NSR can be reduced to 1% with a cash payment of US$1.5M made any time prior to the first anniversary of the start of commercial production. Terciario and Prospero will also have a separate agreement that provides Terciario with up to 910,000 shares of Prospero during the initial 3 year earn-in period (Year 1: 60,000 shares, Year 2: 100,000 shares, Year 3: 750,000 shares).
"Hochschild is an established precious metal mining company and their participation ensures the financial capacity required to advance the Baborigame project through exploration to development," said Tawn Albinson, President and CEO of Prospero. "We have worked with Hochschild in the past and know their operational expertise will be a valuable component in determining the economic viability at Baborigame."
Discussions on the first work program at Baborigame are already under way between the respective project managers from Prospero and Hochschild. The agreement envisions Prospero personnel carrying out exploration activity at the project site during the first year, with Hochschild providing input during planning plus work program supervision.
Tawn Albinson, M.Sc., President of the Company, is a Qualified Person, as defined in NI 43-101, and is responsible for the technical content of this press release.
About Prospero Silver Corp.:
Prospero is a Canadian resource company with the majority of its staff based in Mexico and who work for its wholly owned subsidiary Minera Fumarola, SA de CV (Fumarola). Prospero's objective is to quickly evaluate the properties currently optioned for their suitability to provide size potential and/or amenability for strategic joint ventures.
Cautionary Statement:
This news release contains forward-looking statements within the meaning of the Canadian provincial securities laws that are not historical facts. Forward-looking statements involve risks, uncertainties and other factors that could cause actual results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking statements, including statements regarding future exploration plans. Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, variations in the nature, quality and quantity of any mineral deposits that may be located, the Company's inability to obtain any necessary permits, consents or authorizations required for its planned activities, and the Company's inability to raise the necessary capital or to be fully able to implement its business strategies. The reader is referred to the Company's public disclosure record which is available on SEDAR (www.sedar.com), including the risk factors discussed in Prospero's November 27, 2009 prospectus. Although Prospero believes that the assumptions and factors used in preparing the forward-looking statements are reasonable, undue reliance should not be placed on these statements, which only apply as of the date of this news release, and no assurance can be given that such events will occur in the disclosed time frames or at all. Except as required by securities laws and the policies of the TSX Venture Exchange, Prospero disclaims any intention or obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Contacts:
Prospero Silver Corp.
William Murray
Chairman
(604) 248-0797
Contact Financial
Peter Murray
(604) 689-7422