Simples amigo.. El Zorro Gold ProjectTesoro Chile has the right...

Simples amigo..

El Zorro Gold Project
Tesoro Chile has the right to acquire up to 80% of the El Zorro Gold Project (El Zorro), located 130km from Copiapo in Region III
(Atacama) of Chile, approximately 850km north of the Chilean capital, Santiago. The project covers an area of approximately
10,500 hectares. Tesoro Chile may acquire this interest by meeting exploration expenditures and project payments as reimbursement for historical costs incurred by Sr Bahamondes and his related companies in development of El Zorro as set out in Section 13.2.1(a).

13.2.1 El Zorro Project
On 17 July 2017, Tesoro Chile entered into an agreement with José Agustín Bahamondes Améstica, under which Tesoro has the right to earn up to an 80% interest in El Zorro (El Zorro Agreement). Tesoro Chile and Sr Bahamondes hold their respective interests in El Zorro through a Chilean joint venture company, Wanaco SpA. Wanaco owns 100% of the interests in the El Zorro project tenure through a wholly owned Chilean holding
company El Zorro S.C.M. The key terms of the El Zorro Agreement are summarised below.

(a) Earning obligations and right to participating interest The El Zorro Agreement provides that Tesoro Chile can earn up to an 80%
interest in El Zorro in four stages through:
(i) reimbursing Sr Bahamondes for historical costs incurred by him and his related companies in development of El Zorro as set out
3571-05/2250444_9 76 in the ‘project payment schedule’ below (Project Payments);
and
(ii) incurring expenditure on exploration and development of the project as set out in the ‘exploration commitment schedule’ below (Expenditure).

Note: Scedule is from the prospectus and the 70% requirement has now been completed via the payment and issue of shares to cover



Noting..

(b) Further rights to participating interests
Upon Tesoro Chile earning an 80% interest and the completion of a definitive feasibility study, the parties have agreed to negotiate in good
faith to finalise an agreement to give Tesoro the option to acquire the remaining 20% interest in El Zorro. Should Tesoro Chile earn an 80% interest but not acquire the final 20% interest in El Zorro, Sr Bahamondes’ interest will cease to be a free-carried interest and as such will be subject to dilution if Sr Bahamondes does not contribute his pro rata share of expenditure calls following the completion of stage 4 of the earn-in.

Tesoro Chile also has a right of first refusal over Sr Bahamondes’ interest in the project, such that he must offer his interest in the project to Tesoro
Chile before he can sell to a third party.