 | | 
| | |
Pacific Rim acquired the Zamora project in February 2006 through a purchase option agreement, and expanded the size of the project area in September 2006 with an amendment to the option agreement. Under the terms of the amended agreement Pacific Rim will maintain its option to purchase the expanded Zamora project by making advanced royalty payments to the underlying owners under the following schedule:
| Upon TSX approval of the agreement: |
100,000 shares plus 100,000 warrants of the Company |
| Yearly payments: |
The greater of: |
| First anniversary |
100,000 shares or US $100,000 in shares of the Company |
| Second anniversary |
140,000 shares or US $140,000 in shares of the Company |
| Third anniversary |
200,000 shares or US $200,000 in shares of the Company |
| Fourth anniversary |
300,000 shares or US $300,000 in shares of the Company |
| Fifth and subsequent anniversaries |
400,000 shares or US $400,000 in shares of the Company |
The advanced royalty payments will continue until production is achieved or the exploration concessions expire. Title to 100% of the optioned land area will be transferred to Pacific Rim at such time as a positive production decision is made by the Company. Upon achievement of commercial production from the expanded Zamora project, the underlying owners will receive a 3% net smelter royalty to a maximum of US $10 million (inclusive of the dollar value of the advanced royalty payments made).
The expanded Zamora project comprises a 125 square km land package located 50 km north of San Salvador, the capital city of El Salvador. The project exposes high-level gold bearing veins of the adularia-sericite type of epithermal system (the same type of gold system as at the Company's flagship El Dorado project). Limited grab sampling by the Company of vein outcrops and float within a small portion of the project area has returned values of between 0.01 and 27.24 g/t gold over vein widths of 1 to 4 meters. Of the twenty-seven samples collected, fourteen returned values of more than 1 g/t gold. Highlights include 27.24 g/t gold over 1 meter, 11.37 g/t gold and 173 g/t silver over 4 meters and 10.10 g/t gold and 3700 g/t silver over 3 meters. The juxtaposition of both high-grade gold-bearing veins and gold-bearing volcanic sinter deposits (ancient geysers) at the Zamora project indicates strong potential for the preservation from erosion of the productive boiling zone in this epithermal system.
| | | |
