JOHANNESBURG (miningweekly.com) – Mexico-focused silver miner Impulsora Minera Santacruz, a wholly owned subsidiary of Mexico-focused silver miner Santacruz Silver Mining, has entered into an agreement that will see the company acquire the exclusive rights for 15 years to explore, develop and mine the Cinco Estrellas gold-silver property, in Mexico.
TSX-V-listed Santacruz plans to begin mining activities at Cinco Estrellas as soon as possible and expects to begin shipping mineralised material from the property to its Rosario mine milling facility in the fourth quarter to utilise some of the available capacity.
Management expects that this will enable Santacruz to realise economies of scale at the Rosario mine operations, as well as provide a more flexible operations plan by virtue of having multiple diversified sources of mineralised material for the milling facility.
"The property is located in very close proximity to the Rosario mine and the company has successfully milled mineralised material from the property at the Rosario mine milling facility in prior years," said Santacruz president and CEO Arturo Préstamo.
He added that entering the agreement was a logical strategic step for the company to take, as the initial capital expenditure required to produce mineralised material from the property was anticipated to be modest, and the company was making use of excess capacity at the Rosario milling facility.
Situated about 40 km from Santacruz’s Rosario mine, near Charcas, in San Luis Potosi, Cinco Estrellas covers about 400 ha in total and includes vein systems that have undergone prior mining activity.
In terms of the agreement giving Santacruz the exclusive mining rights to the property, the company has agreed to pay the property vendor a 2.5% net smelter returns royalty on any mineralised material from Cinco Estrellas that is mined and milled or otherwise treated for the eventual sale of the contained metal.
Santacruz has also agreed to make cash payments of $50 000 on signing, $5 000/m for the first six months, and $50 000 on the ninetieth day after entering the agreement.