Coeur Mexicana, a unit of precious metals producer Coeur Mining, has signed a deal with a Fresnillo subsidiary to buy mining concessions in Mexico.
As per the agreement, Coeur will pay $25m in cash and future royalty on specific ounces found on the acquired concessions.
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For every new resource ounce of gold equivalent (AuEq) found between 450,000 ounces and two million AuEq ounces, a royalty payment of $25 per ounce will apply to the concessions.
The concessions are located next to Coeur’s Palmarejo gold-silver complex in Chihuahua, Mexico, and they collectively cover around 7,000 acres.
Coeur said the assets comprise claims that are close to two main zones that make up Palmarejo’s current footprint.
The first group of concessions covers the southeast expansions of the Independencia and Nacion deposits, which are the sites of active mining.
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By GlobalDataSituated to the northeast, the second set of concessions encircles several prospects that have mineralisation and historical resources that were added after Paramount Gold and Silver was acquired in 2015.
Following the closure of the deal, it is anticipated that intensive fieldwork, which has been stepped up over the previous 12 months and has shown extremely encouraging results—including mapping and sampling over the entire Eastern land package—will pick even more speed to evaluate the most advanced targets along these two main trends.
Coeur president and CEO Mitchell Krebs said: “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.
“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 company plans to explore the southeast expansions of the current deposits that trend onto the claims in the near future.
Integrating, updating, and maybe adding to historic resources in the northeastern portion of the previously divided land package will be another top priority in the near future following the closing of the deal, Coeur added.
Subject to regulatory approvals, the transaction is expected to close in 2024.
