Quaterra is committed to funding $1M for exploration in the first year of the agreement, and a minimum of $0.5M in each of the following four years. Quaterra can earn its 90% interest in Groundhog by providing a total of $5M in funding for exploration over five years, and by paying Chuchuna a lump sum of $3M by the end of the fifth year.
Chuchuna will be the operator of the project and will plan, implement and manage exploration field programs as set out in a budget and work plan approved by Quaterra.
“The Groundhog project offers the potential to discover a major deposit in an established porphyry belt,” says Quaterra Chairman and CEO Tom Patton. “With this deal, Quaterra has partnered with a local exploration team that has demonstrated previous exploration success, and with a village corporation that is grounded in the local community and has built strong relationships with its surrounding neighbors and governance authorities.”