Sun River has secured a key permit for the Mexican gold mine. Credit: Africa Studio/Shutterstock.com.

Canadian miner Xali Gold announced that Sun River Gold has secured the main permit for the El Oro tailings project in Mexico.

Sun River Gold obtained a change-in-soil-use permit, which is said to be the main permit needed to go ahead with the project in El Oro Municipality.

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With this permit, Sun River can now move the tailings from the site to an industrial processing site outside of the town.

Xali Gold president and CEO Joanne Freeze said: “We are very excited that Sun River now has the most important permit in hand so that ground preparation work can finally begin on our tailings project in El Oro.

“Sun River has been diligently advancing the tailings project and we have given several extensions due to the delays in the granting of this permit.”

Sun River has the option to acquire 100% of the project from Xali Gold by making a total of $500,000 in staged payments.

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In January this year, Xali extended the production earn-in option agreement with Sun River till December this year, for an additional net profits interest (NPI) payment.

The payment includes 5% NPI along with life-of-mine royalty on the production from the assets.

Xali Gold, through its subsidiary Minera CCM El Oro Jales, secured an agreement with the municipality to recover all the gold and silver from the mine tailings deposit and paying to the municipality 8% on net profits interest.

The project is claimed to have an estimated 1.2 million tonnes grading 2.94 grams per tonne (g/t) of gold and 75.12g/t of silver containing 119,900 ounces of gold and 3,061,200 ounces of silver.