Peñascudo, Argentina
(Penascudo Property Information)
On June 11, 2003 Ballad and IMA Exploration Inc. (“IMA”) reached an agreement for Ballad to acquire by option up to an 85% interest in the 9,000 hectare Penascudo Gold-Silver Project from IMA Exploration Inc. The Penascudo Gold-Silver Project is located in the Patagonia region of Southern Argentina, the source area of a string of recent gold and silver discoveries, the most recent being the Navidad high-grade silver discovery.
The agreement between Ballad and IMA provided Ballad with a 60 day period to conduct a review of the property including a due diligence geological study of the Penascudo Property for Ballad by an Independent Qualified Person.
The Company’s independent Qualified Person conducted an initial review of a gold and silver discovery area, named the EL REY Gold/Silver zone. Results from that initial review include bonanza grade chip samples assaying up to 1,102.99 grams/tonne gold (32.18 oz/ton) and 704.7 grams/tonne silver (20.56 oz/ton) over a 0.35 meter wide vein structure and grab samples assaying as high as 1,098.23 grams/tonne gold (32.04oz/ton) and 1,144.5 grams/tonne silver (33.39 oz/ton) over the same vein system. At that point in exploration the EL REY Gold/Silver zone had been mapped for 55 meters along strike and was interpreted to be possibly contained within a larger 600 meter long structure.
IMA granted Ballad an option to earn an initial 70% interest in the property for incurring US $1,800,000 of exploration work staged over five years, making a one time US $300,000 cash payment to exercise the option and issuing 500,000 post consolidation common shares at the approval of the option by the TSX Venture Exchange and a further 500,000 common shares on the exercise of the option. Ballad’s interest is subject to a 1.5% NSR Royalty.
Ballad may increase its interest by funding a feasibility study. On August 12, 2003, Ballad notified IMA that it is proceeding with the Option Agreement.