Argonaut to sell Mexico projects as focus shifts to Ontario mine
Toronto-listed Argonaut Gold said on Monday that it will sell its projects in Mexico to junior explorer Heliostar Metals, as its focus shifts to its cornerstone asset, the Magino gold mine, in Ontario, Canada.
“This agreement allows Argonaut to potentially unlock value in two noncore Mexican assets and provides Argonaut with a very attractive upside for its shareholders," said CEO Larry Radford.
Heliostar Metals will buy its Ana Paula gold project for $30-million in cash and shares and has been granted an option to acquire the San Antonia project.
Under the option on San Antonia, Argonaut will receive a cash payment of $80-million in the event that the average gold price is below $1 800/oz for the six months preceding Heliostar exercising the option; $120-million if the average gold price is above $1 800/oz, but below $2 000/oz, and $150-million if the price is above $2 000/oz in the six months preceding the exercising of the option.
Argonaut will also be granted a 2% net smelter return royalty if the option is exercised.
The term of the option is for a three-year period provided, but may be extended for an additional 18 months if Heliostar successfully acquires an environmental permit from Secretaría del Medio Ambiente y Recursos Naturales to advance the San Antonio project.
In Mexico, Heliostar owns 100% of three early stage epithermal projects in Sonora that are highly prospective for gold and silver. Heliostar’s flagship asset is the 100% controlled Unga Gold project on Unga and Popof Islands, in Alaska.
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