Chesapeake's Guatemalan subsidiary, Hunt Exploration S.A., has an option to acquire a 100% interest in El Escorpion ("Escorpion) by making payments totalling US$351,000 over five years.
The Escorpion property is a 900 hectare concession located 85 kilometers by paved road southeast of Guatemala City. Escorpion is situated 7 kilometers southwest and along trend of Tahoe Resources Inc.'s world class Escobal deposit which has a NI 43-101 compliant indicated mineral resource of 367 million ounces of silver grading 422 g/t, plus 37 million ounces of silver grading 254 g/t in the inferred category. Mineralization at Escobal is associated with steeply dipping and northeast-southwest trending intermediate sulfidation epithermal silver rich quartz veins with significant values in gold, lead and zinc. The Escobal land package completely surrounds the Escorpion project.
The outcropping mineralization at Escorpion appears to have many similarities to that at Escobal and occurs in a fault controlled, intermediate sulfidation epithermal system characterized by several multistage, subparallel silver-lead-zinc quartz-carbonate veins and stockworks. To date, the northeast-southwest trending system has been traced discontinuously for over 1500 meters along strike and remains open to the northeast and southwest. The system is characterized by carbonate-minor quartz vein swarms in the southwest (Mina Blanca zone) and quartz stockworks and quartz veins in the northeast part of the concession (Escorpion –Los Pozos zones). The exposed vertical extent of the system is greater than 300 meters.
The Mina Blanca zone has been traced along strike for 350 meters and in places, up to 50 meters wide. This zone consists of numerous en echelon, oxidized multistage veins that have returned channel samples up to 78 g/t silver, 4% lead and 0.2% zinc. The Escorpion and Los Pozos zones are located in erosional windows 400 meters apart in an area of extensive volcanic cover. The Escorpion zone hosts a drusy to massive quartz stockwork that has been mapped over an area 70 meters by 100 meters with channel samples up to 33 g/t silver, 0.2% lead and 0.2% zinc. The Los Pozos zone is situated topographically higher with the vein and surrounding stockwork hosted in argillized rhyodacite rocks.
Chesapeake has agreed to sell its interest in Escorpion to Gunpoint Exploration Ltd. ("Gunpoint) in return for Gunpoint issuing and granting the following:
500,000 common shares of Gunpoint
500,000 warrants exercisable at $1.50 per share for a term of five years
A 1.5% NSR royalty in the event Chesapeake purchases the existing 1.0% NSR
1.0 million common shares of Gunpoint in the event a NI 43-101 measured and indicated resource estimate of 1.0 million gold equivalent ounces is achieved on the Escorpion property.