Vancouver-headquartered Zacatecas Silver will buy the Esperanza gold project – a low-cost, low capital intensity and low technical risk growth project in Mexico – from dual-listed Alamos Gold.

Alamos says the sale of Esperanza is consistent with its strategy of monetising and maximising the value of its noncore assets, while Zacatecas states that the transaction will afford the Esperanza project the full focus of a team of mine builders and financiers.

The total consideration of the transaction is about $60-million, with most of the payments not made until significant steps towards commercial production are achieved. The initial consideration consists of $5-million in cash, $10-million in Zacatecas Silver shares and a silver stream in favour of Alamos valued at $6-million.

Zacatecas Silver CEO Bryan Slusarchuk says that the transaction is “transformational” for the company, which now also has an advanced stage, high-grade, low-cost gold project in addition to its silver projects.

In conjunction with the transaction, Zacatecas has arranged a C$15-million private placement financing to increase the size of its treasury.

THE PROJECT
Alamos has reported a resource estimate of a measured and indicated resource of 34.35-million tonnes at 0.98 g/t gold and 8.09 g/t silver for 1.08-million ounces of gold and 8.94-million ounces of silver and an inferred resource of 718 000 t at 0.80 g/t gold and 15.04 g/t silver for 18 000 oz of gold and 347 000 oz of silver.  

To date, significant core and reverse circulation drilling has occurred at the Esperanza project, resulting in a total of 389 drill holes for 69 716 m.  

Based on previous preliminary assessments completed by previous owners, the company anticipates that the project will be amenable to a conventional openpit, heap leach operation with two-stage crushing. Crushed material will be conveyed to the leach pad and irrigated with dilute cyanide solution. Gold will be recovered from pregnant solutions utilizing carbon adsorption, subsequent electrowinning and on-site smelting to produce gold and silver doré bars. 

Zacatecas says it plans to carry out an extensive work programme to prepare an updated resource estimate, undertake economic studies on the project, and conduct an infill drill programme on the deposit as well as drilling on nearby exploration targets.