Sunstone Metals (ASX:STM) to expand landholding in Ecuador

• Sunstone Metals (STM) has signed an agreement to acquire 100 per cent interest in the El Palmar copper-gold porphyry project in Ecuador
• Under the terms of the agreement, the company will pay a total of approximately $4 million at various stages over the next four years and fund all exploration activities
• The vendors of the project will also retain a one per cent net smelter return royalty, 75 per cent of which may be acquired by Sunstone for a fee of $1.4 million
• The company intends to carry out a two-to-three month surface exploration program at the project upon completion of the acquisition
• Sunstone Metals shares are steady in early trade, priced at 1.4 cents

Sunstone Metals (STM) has signed an agreement to acquire a 100 per cent interest in the El Palmar copper-gold porphyry project in Ecuador.

Located 60 kilometres northwest of the country’s capital Quito, the project on the prolific Toachi Fault Zone, which hosts a number of significant assets, including the Alpala and Llurimagua deposits.

Under the agreement, Sunstone will pay approximately $4 million to the vendors at various stages over the next four years and assume the management and funding of exploration activities at the project.

Roughly $70,000 will be paid upon signing of the agreement, followed by $350,000 during the first two years of the agreement, $838,000 over the next two years, and a final $2.8 million payment on July 1, 2024.

The vendors of the El Palmar project will also retain a one per cent net smelter return royalty, 75 per cent of which may be purchased by Sunstone for approximately $1.4 million.

Malcolm Norris, Managing Director of Sunstone Metals, said the El Palmar project is a promising copper-gold target, as has already been demonstrated by previous exploration efforts.

“Historical broad exploration results are showing a 600-metre diameter area of anomalous copper and gold that has not been adequately tested with drilling,” Malcolm noted.

“El Palmar adds to our portfolio in Ecuador in a geological district that we are very familiar with. This is a low entry cost, drill-ready opportunity,” he added.

A binding term sheet for the acquisition has already been signed, and a full agreement is expected later this quarter.

Sunstone intends to undertake a two-to-three month surface exploration program at the project following the completion of the agreement. A valid permit is already in place, and drilling is expected to begin in late 2020.

Sunstone Metals shares are steady in early trade, priced at 1.4 cents at 10:37 am AEST.