Tarsis Resources (CVE:TCC) said late Friday that Osisko Mining has unexpectedly decided not to continue with exploration at its Erika property in Mexico, as per an option agreement signed earlier this year. As a result, Tarsis will maintain its 100% interest in the property going forward.
In the release, Tarsis said the return of the property at this time was a surprise move, considering Osisko was drilling on the asset in November and December. The junior company also noted that its personnel visited the project site and saw two drills on November 26 and 27.
During the option period, Osisko completed detailed geological mapping and geochemical sampling over the summer, with specific drill targets identified in addition to those already recommended by Tarsis.
A preliminary drill program was also finished in the fall of this year, Tarsis said, that was planned to consist of up to 3,000 metres and eight holes. The company said it has not yet received any results from this campaign.
Under the terms of the option deal, Osisko had to spend $500,000 on exploration at Erika before February of next year as part of its earn-in commitment, with the mining giant having spent a total of $339,000 up to September 30, before the drill program started.
In order to have earned the agreed 51% stake, Osisko would have had to make staged cash payments to Tarsis of $1.0 million, and spend $4.0 million on exploration over four years.
Tarsis said it is in the process of collecting new data that was assembled on the project, and will determine the most effective way to advance the asset.
The Erika property, in the Guerrero Gold Belt, covers approximately 16,000 hectares, and can be accessed by paved road via Federal Highway 95, which crosses the eastern boundary of the claims. Acapulco is 150 km south of the property.
Tarsis functions on a prospect generator model, which means it seeks out prospective exploration projects to acquire, and then vends or options them to partners for development. This model has allowed the junior to raise cash in an otherwise tough market.
The company just last week closed a bolstered $0.36 million financing, with proceeds to be used for its prospect generation efforts in the Yukon, Mexico and the U.S., as well as for early-stage work to advance its existing properties to joint venture status. It has been able to raise funds from some marquee names in the industry, including the likes of Kinross Gold (TSE:K), Sprott's Rick Rule and Almaden Minerals.