Coeur Mining subsidiary Coeur Mexicana has signed a purchase agreement with a subsidiary of Fresnillo to acquire mining concessions adjacent to the Palmarejo gold-silver complex in the state of Chihuahua, Mexico, for US$25 million in cash.
“This transaction fills in two key strategic gaps in the large land package east of the Palmarejo mine, which unlocks significant potential in areas unencumbered by the existing Franco-Nevada gold stream,” explained Coeur CEO and President Mitchell J. Krebs.
“Once complete, our land holdings outside the gold stream-encumbered areas will increase by nearly 20% and the overall Palmarejo complex will consist of a single nearly contiguous district spanning over 70,000 acres of highly prospective and underexplored ground in the heart of the prolific Sierra Madre Occidental.”
The first set of concessions cover the southeast extensions of the Independencia and Nacion deposits where mining currently takes place. The second set of concessions, located to the northeast, surrounds multiple targets containing mineralization and historic resources that were added through the 2015 acquisition of Paramount Gold and Silver.
The terms of the transaction include an up-front cash payment to Fresnillo of $10 million payable upon closing, and a royalty payment of $25 per ounce for each new gold-equivalent ounce of resource discovered between 450,000 and 2 million AuEq ounces.
In addition to Palmarejo, Coeur owns the Rochester silver-gold mine in Nevada, the Kensington gold mine in Alaska and the Wharf gold mine in South Dakota. It also wholly-owns the Silvertip silver-zinc-lead exploration project in British Columbia.
Source: Coeur Mining