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Fortuna Silver Mines buys interest in land surrounding Mexican mine

24th January 2013

By: Henry Lazenby

Creamer Media Deputy Editor: North America

  

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TORONTO (miningweekly.com) – Latin America-focused silver producer Fortuna Silver Mines’ subsidiary Compania Minera Cuzcatlan has entered into an acquisition and option agreement with Plata Pan American, a wholly owned subsidiary of Pan American Silver for the 6 254 ha Taviche Oeste Concessions immediately surrounding the San Jose mine, in Oaxaca, Mexico.

Under the agreement, Cuzcatlan would buy a 55% interest in the Taviche Oeste Concessions for $4-million. Once a production decision had been made to develop ore from the concessions, Cuzcatlan would buy the remaining 45% interest in the property for $6-million.

Plata Pan American would retain a 2.5% net-smelter royalty on ore production from the property.

"This is an important acquisition for our company, not only does this simplify the mineral tenure immediately surrounding our existing mine and infrastructure, but the acquisition strengthens our exploration portfolio along the trend of current production. We will be planning an aggressive exploration programme to immediately follow up on targets that we have developed," CEO Jorge A Ganoza said.

The transaction is expected to close at the end of the month.

The company’s Toronto-listed shares declined 4.28% in value to C$4.25 apiece on Thursday.

Edited by Creamer Media Reporter

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