Premier buys option on property near Mercedes
TSX-listed Premier Gold has entered into an agreement to buy an option over the San Felipe property – 55 km from its Mercedes mine – in Sonora, Mexico, presenting a near-term development opportunity close to an existing operation.
Premier will buy the option to acquire 100% in the San Felipe property, consisting of several claim groups comprising 16 265 ha, from fellow-listed Americas Silver.
London-listed Hochschild is the underlying owner of the San Felipe property.
Premier CEO Ewan Downie said on Wednesday that it would assess options to bring San Felipe to production to complement existing production in Mexico.
The potential development options under consideration include adding a parallel flotation circuit at Mercedes to increase output in the near term, building a standalone mill at San Felipe or bringing San Felipe into development at the end of the Mercedes mine life and processing mineralised material at the existing complex.
San Felipe is partially developed with an existing ramp and several mining-related facilities already constructed on site. With 69 000 m of drilling on the property and several existing deposits open for expansion, Premier said that there was potential for new discoveries and increased mineral resources at San Felipe.
As consideration, Premier will pay Americas Silver $7-million on closing, and make additional payments of $1.9-million upon the making of a positive construction decision and then upon achieving commercial production.
Premier will also make eight quarterly payments of $750 000 to Hochschild pursuant to the underlying option agreement.
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