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Allied acquires option to buy Colorado Klondike copper property

Canada’s Allied Copper acquired the option to buy 100% of the Klondike copper property, in Colorado, US. The company intended to start drilling in the first half of 2022 and aimed to set up a producing mine to take advantage of the strong demand for copper. 
Allied acquires option to buy Colorado Klondike copper property Allied acquires option to buy Colorado Klondike copper property Allied acquires option to buy Colorado Klondike copper property Allied acquires option to buy Colorado Klondike copper property Allied acquires option to buy Colorado Klondike copper property

Nathan Richardson

The property consists of 76 unpatented mining claims, a state of Colorado exploration permit and an exclusive right to a state lease, Allied said. 

Allied was granted the option as part of a deal signed by Cloudbreak Discovery, Tarsis Resources, and Alianza Minerals. 

To exercise the option, Allied would need to incur an aggregate of C$4.75 million in exploration expenditures on Klondike over a period of four years, with at least C$500,000 to be spent before the first anniversary of the closing date. 

Allied would need to make aggregate C$400,000 in cash payments to Cloudbreak and Alianza with pro-rata interest over four years. 

Allied would also need to issue seven million common shares to Cloudbreak and Alianza, and a further three million common-share purchase warrants on the third anniversary of the date of the option agreement. 

The optionors would retain a 2% net smelter royalty, which is subject to a buy-down provision where Allied may, at its discretion, repurchase half of the royalty for C$1.5 million within 30 days of commercial production. 

Allied said that sampling done on the property returned 1.56% copper and 1.4 grams per tonne silver over a 4.6 metre chip sample of bleached, bitumen spotted and altered Jurassic sandstones. 

Allied traded on the Toronto Stock Exchange on February 6 at C$0.23/share, which was up 2% day-on-day. 

The company had a market capitalisation of C$9.22 million.