Australian company Mitre Mining has signed an agreement to acquire the Cerro Bayo silver-gold project in Chile from Equus Mining for A$5m ($3.31m).

Located in the Asyen region in southern Chile, the Cerro Bayo project commenced production in 1996. It was placed on care and maintenance since October 2022.

During that period, the mine reported production of more than 45 million ounces (moz) of silver and 650,000oz of gold.

The project comprises two distinct main districts, separated by 4km. These include the Cerro Bayo and Laguna Verde mining districts.

The Cerro Bayo project includes the 500,000tpa Cerro Bayo flotation plant and mining infrastructure, existing mineral resources, and a mining claim package of more than 300km².

Mitre Mining said the Cerro Bayo project has more than A$150m worth of infrastructure on site that would support exploration and low-cost restart of the mine.

Mitre Mining executive director Ray Shorrocks said: “The Cerro Bayo acquisition is an exceptional company-making opportunity for Mitre because it comes with a significant resource, huge scope for rapid resource growth and the option of near-term production thanks to the existing plant and infrastructure.

“The infrastructure alone has a replacement value of more than $150m. And in addition to the significant resource, there is abundant known mineralisation which will help underpin rapid resource growth and immense district-scale potential.”

Subject to various conditions, the acquisition is planned to be completed in early 2024.

Furthermore, Mitre has signed an agreement to purchase the Los Domos silver-gold project situated adjacent to the Cerro Bayo mine from Equus Mining and its 75%-owned subsidiary Equus Patagonia.

Mitre Mining is planning to undertake a two-tranche placement to raise A$8.3m.

The proceeds will be used by Mitre to finance the acquisition, as well as to establish a near-mine rapid resource growth programme to increase the high-grade silver-gold resource base.