TSX-V-listed Plata Latina says silver major Fresnillo has exercised its option to purchase its Naranjillo property, in Mexico.
The option stems from a 2017 agreement that provided Fresnillo subsidiary Metalúrgica Reyna with a three-year term in which to conduct exploration and exercise the option.
The Naranjillo project is a grassroots epithermal silver/gold discovery made by the company in 2012 and is located in the Mexican Silver Belt, about 35 km southeast of the Guanajuato mining district.
In the three-year option period, Reyna had to pay $1.65-million in stages for the right to explore the property. During that time, Reyna was also required to spend a minimum $3-million in exploration.
In January, before the end of the three-year option period, Reyna notified the company of the exercise of its option to purchase the Naranjillo property for a payment of $500 000 and the granting of a 3% net smelter return royalty.
Reyna will make advance royalty payments of $100 000 a year until either the maximum has been paid or commercial production starts from the Naranjillo property.