The 790Ha El Palmar copper-gold porphyry project is located in Imbabura province, 60km (a 3 hour drive) from the national capital Quito. Good access is provided by the sealed Calacali – La Independencia road, and then minor gravel roads to the project area.
The property is subject to a Staged Acquisition Agreement between Sunstone Metals and Golden Exploration (‘GOEX’).
El Palmar lies along the regional-scale NE-trending Toachi Fault zone. The Toachi Fault transects the Western Cordillare which is highly prospective for porphyry copper-gold-molybdenum systems (e.g Llurimagua and Cascabel).
A trend of regional porphyry deposits (and targets) extends from the Colombian border southwest through Cascabel and Llurimagua, with El Palmar lying within the southern end of this trend.
The El Palmar property hosts a well-defined porphyry target central to the concession area and a series of epithermal veins in the northern sector of the property.
The El Palmar property has seen limited historical exploration by Lowell Mineral Exploration Sucursal Ecuador (2007-2008), Codelco (2011-2012) and by GOEX since the concession was granted. Surface work has primarily been rock-chip sampling (1426 samples) and basic geological mapping.
The central porphyry target is associated with a multi-phase intrusive complex spanning an area of around 700m diameter emplaced within a volcaniclastic sequence. Hydrothermally altered intrusive breccias are recognised and likely reflect upper parts of the system.
Codelco drilled 3 holes in 2011-2012 for a total meterage of 1313.68m. The deepest two holes were just over 500m long. Their holes were not an ideal test of the system. Nevertheless their best sited hole (EPD-01), likely on the side of the system, intersected 467m @ 0.18 g/t Au, 0.1% Cu, including 186m @ 0.33 g/t Au, 0.16% Cu.
Exploration by Sunstone commenced in early 2021.
STAGED ACQUISITION AGREEMENT TERMS
Sunstone signed a Staged Acquisition Agreement with GOEX on 5th October 2020. Sunstone can acquire a 100% interest in GOEX, which holds the El Palmar concession, through:
- An initial cash payment of US$50,000 upon signing of the Staged Acquisition Agreement (completed);
- Funding and managing all exploration activities on the project,
- Payments totalling US$250,000 in stages linked to advancement through to the commencement of a phase 2 drilling program in the first two years;
- Payments totalling US$600,000 over the 2 years from July 1st, 2022;
- Final cash payment of US$2,000,000 on July 1st, 2024;
The shareholders of GOEX, at the time of signing the Staged Acquisition Agreement, will receive a 1% net smelter royalty. Sunstone will have the right to buy back 75 per cent of the royalty (taking it to 0.25%) for US$1 million.