Listed Mining Companies
3rd June 2008
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Vancouver-based junior Aurcana owns 80% of the mine, which was originally developed and operated for 30 years by Mexican resources group Penoles.
Silver Wheaton will make an upfront cash payment of $25-million, in order to acquire 50% of all silver produced from the La Negra mine for the lesser of $3,90 or the prevailing market price per ounce of silver.
As part of the agreement, Aurcana has also agreed to complete a separate life-of-mine silver stream agreement on its soon to be acquired Shafter silver mine located in Texas, in the US, which is expected to start producing in 2009.
The terms of the Shafter agreement are expected to be announced in the third quarter of 2008, the company said.
Penoles began operations at the La Negra mine in 1970 and produced over 30-million ounces of silver, as well as zinc, copper and lead.
The mine was placed on care and maintenance in 2000.
In early 2006, Aurcana bought an 80% interest in the mine and and has since increased the resources at the project by almost 80% over the historic Penoles resources
Commercial production began in July 2007 at 1 000 t/d, and Aurcana has announced plans to double throughput.
Silver Wheaton buys silver from producers on a long-term basis, at predetermined prices, and then sells the metal at the current spot price
