VANCOUVER (miningweekly.com) – TSX-V-listed explorer and project developer Minera Alamos has entered into an option agreement with fellow Canadian miner Vista Gold, to acquire all of the issued shares of Vista subsidiary Minera Gold Stake, which owns the Guadalupe de Los Reyes gold project, in Mexico.
Minera Alamos believes the project is an ideal complement to its flagship La Fortuna gold project, and is ideally situated to be advanced in tandem as a second potential mine.
“One of our stated objectives since welcoming Osisko Gold Royalties as a strategic partner mid-year was to acquire additional near-term development projects in Latin America and to significantly grow the company's prospective production baseline. Entering into this agreement is the first step in this evolution and we look forward to additional announcements in the coming months," said Minera Alamos president and CEO Darren Koningen in a news release earlier this week.
Under the terms of the option agreement, Mineral Alamos will earn 100% of Minera Gold Stake shares after making payment of $6-million to Vista in staged payments. These payments will comprise $1.5-million on closing, $1.5-million on each of the 12 and 24 month anniversary dates – to maintain the option – and a final purchase price of $1.5-million to acquire the shares on or before the announcement of a construction decision or the 48-month anniversary of the agreement, whichever comes first.
Production from any openpit (heap leach) mining operations at the project will be subject to a minimum 1% net smelter return (NSR) royalty payable to Vista, which could increase up to 2% if gold prices exceed $1 600/oz. This royalty is capped at a maximum cumulative amount of $2-million.
Vista also retains the right to acquire a 49% non-carried interest in the development of underground gold resources should the company decide at a later date to pursue potential zones of deep mineralisation (this excludes all openpit accessible mineralisation).
Should Vista choose not to proceed with an underground development, it will retain a NSR royalty on mineral production from such underground production at the same rate as the openpit royalty. The underground NSR royalty is not capped.
Guadalupe is a gold/silver project located in the Sierra Madre Range, in Sinaloa state, about three hours from the company's base of operations, in Culiacan.
Minera Alamos believes it is one of the most significant historic gold producers in this region of Mexico and contains a near-surface gold resource consisting of 380 100 indicated ounces, contained in 6.8-million tonnes grading 1.73 g/t gold, with a further 155 200 oz languishing in the inferred category, held in 3.2-million tonnes grading 1.49 g/t gold.
According to Minera Alamos, the project holds significant exploration potential from previously identified mineralised structures that remain undrilled.
Minera Alamos’ immediate goal is to use its extensive in-house technical expertise to evaluate the potential for the project to be developed as a low-capital heap-leaching operation.
Haywood Securities has acted as exclusive financial adviser to Minera Alamos in connection with the agreement.