Weststar Resources Corp. (CVE:WER) said Tuesday it has optioned more than half of its joint venture Axe property in British Columbia to Xstrata Copper Canada, a unit of Xstrata (LON:XTA), the world's fourth largest copper producer.
Weststar and Bearclaw Capital Corp are parties to a joint venture for
the Axe property, under which Weststar holds a 70 percent interest, with
Bearclaw holding the remainder.
The Axe property is an advanced
stage project with known porphyry copper mineralization, which has been
drill tested several times since the 1960s. The project is comprised of
25 mineral claims, or 4,983 hectares, located in the Similameen Mining
Division, 20 kilometres north of Princeton in British Columbia.
as a company feel this is an excellent opportunity to advance the Axe
Property and could unlock the value of the Axe Property for the benefit
of our shareholders," said Weststar president, Mitchell Adam.
have a company of Xstrata's calibre spend up to $18 million on the Axe
property is a major milestone for the project. Additionally, we are of
the opinion it is a great vote of confidence in the British Columbia
copper mining industry."
Under the terms of the option agreement,
Xstrata will have the rights to earn a 51 percent interest in the
assets of the Axe joint venture, and to carry out exploration activities
on the project by paying C$3.0 million in exploration expenditures by
the end of the earn-in period, or four years.
In addition, in
order to maintain the option, Xstrata must pay to Weststar and Bearclaw,
in porportion to their interests in the joint venture, C$25,000
initially, C$25,000 on the first anniversary of the option, C$30,000
after two years, C$40,000 after three years, and C$60,000 after four
If Xstrata exercises the option, a joint venture will be
formed between Xstrata, Weststar and Bearclaw, with Xstrata as the
initial operator holding a 51 percent interest, and Weststar and
Bearclaw holding a 34.3 percent and 14.7 percent stake, respectively.
Xstrata acquires the 51 percent, it will also have the option to buy an
additional 24 percent interest, increasing its stake to 75 percent, by
either completing a feasibility study, or spending no less than C$15.0
million in expenditures. In this event, Weststar will be left with a
17.5 percent interest in Axe, with Bearclaw holding 7.5 percent.
Xstrata also has a right of first refusal over any direct or indirect sale or transfer by Weststar or Bearclaw.
Axe property was acquired in the 1960s by Adonis Mines, which began
exploration for porphyry copper style of mineralization.
exploration programs were completed by Adonis, Amax Exploration and
Cominco during the 1970s and early 1980s. In total, 185 holes,
comprising some 14,000 metres, were drilled during this period.
main area of the Axe property has been continuously held under title
since 1967. A 14-hole diamond drill program was completed by Weststar in
2006 and 2007 totalling 3,401 metres.
is focused on its La Paloma property in the state of Jalisco, Mexico,
where in February it announced the completion of an induced
polarization/resistivity survey. It also started the planning for the
upcoming diamond drill program at the site.
The property is located approximately 70 kilometres west of the city of Guadalajara.
IP/Resistivity survey at La Paloma consisted of a total of 5.8
line-kilometres, which were surveyed along a series of seven lines
targeting an 800 metre strike extent of the Main "Piedra Bola" Vein
The survey represents the final stage in WestStar's phase one
exploration program, which included property-wide geologic mapping, the
collection of 194 rock grab and channel samples, 656 soil samples, and
174 stream sediment samples.
WestStar is now selecting drill targets in preparation for a 2,000
metre diamond drill program at the property, which will target the most
prospective anomalies within the Main "Piedra Bola" Vein structure, as
well as evaluate the potential of additional mineralized veins on the
The Main Vein has been defined over a one kilometre strike length,
with rock channel sampling assaying up to 0.84 grams per tonne (g/t) of
gold, and 64 g/t silver over 6 metres.
The primary goal of the company is to define a compliant gold and
silver resource at the site. The property was, at one time, owned by
Penoles, who relinquished it in 1980.