The Lomitas Negras porphyry copper project is located approximately ten kilometers southeast of the town of San Manuel, Arizona, in a broad area of post-mineral cover rocks. EMX has a Regional Strategic Alliance agreement, through its wholly owned subsidiary Bronco Creek Exploration, Inc. (“BCE”), with South32 Limited (“South32”) covering Arizona, New Mexico and Utah, but excluding South32’s Hermosa project in southern Arizona. The Agreement provides funding for generative work and property acquisitions, as well as a framework to advance projects of interest. Under the terms of the Agreement, which has an initial term of two years, South32 will provide annual funding for generative work performed by EMX personnel to identify properties for exploration work (“Alliance Exploration Properties” or “AEPs”). EMX personnel will conduct exploration on AEPs with additional funding from South32 in order to identify drill stage projects as Designated Projects. Designated Projects will advance under separate option agreements providing for work commitments and cash payments to EMX during South32’s earn-in period, and upon earn-in, a 2% net smelter return (“NSR”) royalty interest and pre-production and milestone payments to EMX’s benefit. (see Company news release dated December 6, 2018). Lomitas Negras has been selected by South32 as an initial AEP.
The Lomitas Negras property is ringed by Laramide-age intrusive rocks and porphyry copper/skarn deposits that include San Manuel-Kalamazoo (~20 kilometers north), Copper Creek (~25 kilometers northeast), and Oracle Ridge (~10 kilometers southwest). Nearby outcrops exhibit alteration and anomalous base metal mineralization that characteristically occurs on the margins of porphyry copper systems. EMX’s recognition of the altered outcrops, combined with a new interpretation of the extensional structural setting of the area, led to the identification of concealed porphyry copper targets beneath the post-mineralization pediment cover at Lomitas Negras.
Note: The nearby mines and deposits in the region provide context for EMX’s Project, which occurs in a similar geologic setting, but this is not necessarily indicative that the project hosts similar mineralization.