Tarsis Resources (CVE:TCC) has said that its partnerOsisko Mining Corp (TSE:OSK) started exploration work at the Erika property in Mexico last month, with drilling expected to start in the final quarter of 2013.
The news came as Tarsis provided investors with an update on the property late Wednesday.
The Erika property is located in the Guerrero Gold Belt and covers about 16,000 hectares in Guerrero State, Mexico. The property is accessed by paved road via Federal Highway 95, which crosses the eastern boundary of the claims. Acapulco is 150 km south and Iguala is 47 km north of Erika.
The work to be carried out will be made up of detailed geological mapping and geochemical sampling, with the hope of identifying drill targets that are expected to be tested in the fourth quarter of this year.
According to the terms of the agreement for the property, Osisko must spend $0.5 million on exploration at Erika before February 2014 as part of its earn-in commitment. In order to earn a 51 per cent stake, Osisko must make staged cash payments to Tarsis of $1.0 million, and spend $4.0 million on exploration over four years. Osisko can also boost its stake to 75 per cent if it completes a feasibility study for the project.
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.
Indeed, the company has strong backers. Kinross Gold (TSE:K) invested about a year and a half ago, and now has around a 9 per cent stake, while Sprott's Rick Rule has a more than 10 per cent interest. Almaden Minerals (TSE:AMM) also holds over 10 per cent.
Last October, Tarsis closed a financing for total proceeds of just over $1 million, raising double what it had originally anticipated. Backers in the offering included Sprott, and management, which holds a significant chunk of shares, among others.
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