Latin Metals Inc. (TSX-V: LMS) (OTCQB: LMSQF) announces that it has signed an offer letter with Patagonia Gold Corp. (TSX-V: PGDC) which provides for a six-month due diligence period for Patagonia and sets out the proposed commercial terms of a definitive option agreement whereby Patagonia will be provided with the option to acquire the Company’s interest in the Mina Angela project located in the Province of Chubut, Argentina. To exercise the Option in full, Patagonia will be required to make payments to Latin Metals in the aggregate amount of US$1 million cash and Patagonia will be required to grant to Latin Metals a 1% net smelter returns royalty1 on any future production from the Project. The Offer Letter was accepted by Patagonia on August 12, 2019 and Patagonia has made the initial cash payment of US$40,000 to Latin Metals as contemplated under the Offer Letter (see Table 1 below).
“The proposed sale of Mina Angela is consistent with the Company’s strategy of placing its assets in the hands of capable partners and allowing Latin Metal’s shareholders retain exposure to the assets’ future potential,” stated Keith Henderson, Latin Metal’s President & CEO. “Mina Angela is a former producing mine with significant exploration upside. I believe that the management team at Patagonia has the ability to finance and execute the exploration necessary to realize that potential upside and, if they are successful, Latin Metals and its shareholders stand to benefit from royalty payments on any future production from Mina Angela.”
The Offer Letter sets out the expected terms of the Definitive Agreement, whereby Patagonia can acquire 100% of the Company’s interest in the Project, subject to the NSR Royalty in favour of the Latin Metals as follows:
Table 1: Schedule of Proposed Commercial Terms
|Schedule of Payments||Cash Payments||Royalty
|Within ten days from acceptance of the Offer Letter||US$40,000
|Upon signing the Definitive Agreement||US$250,000||—||—|
|Upon exercise of the Option (within six months of signing the Definitive Agreement)||US$250,000||—||100%|
|Within 30 days of verification that the legal restrictions preventing development of mining activity in the Chubut Province and at the Project have been lifted (to Patagonia’s satisfaction)||US$500,000||—||100%|
|Commencement of Production at the Project||—||1% NSR
Upon exercising the Option, Patagonia is expected to take responsibility for keeping the mining properties comprising Mina Angela in good standing. Latin Metals will be responsible for all obligations arising or accrued on Mina Angela until Patagonia exercise the Option.
The closing of the acquisition of Mina Angela by Patagonia is subject to certain customary closing conditions, including the entry into the Definitive Agreement and receipt of TSX Venture Exchange acceptance.
About the Mina Angela Property
The Mina Angela property is situated in the Somuncura Massif of southern Argentina and is comprised of 44 individual claims located approximately 50 km east-southeast of Patagonia’s 100% owned Calcatreu gold project. The Navidad silver and base metal deposit is located 45 km further to the south-southeast of Mina Angela. Cardero Argentina S.A., Latin Metal’s wholly-owned subsidiary, is currently the 100% owner of the mineral claims comprising the Project, subject to a 1% NSR from future production on Mina Angela.
About Patagonia Gold
Patagonia Gold Corp. is a TSX Venture Exchange listed company that seeks to grow shareholder value through exploration and development of gold and silver projects in the Patagonia region of Argentina. The Company is primarily focused on the Calcatreu project in Rio Negro and the development of the Cap Oeste underground project. Patagonia, indirectly through its subsidiaries or under option agreements, has mineral rights to over 350 properties in several provinces of Argentina, Chile and Uruguay and is one of the largest landholders in the province of Santa Cruz, Argentina.
About Latin Metals
Latin Metals is a mineral exploration company acquiring a diversified portfolio of assets in South America. The Company operates with a Prospect Generator model focusing on the acquisition of prospective exploration properties at minimum cost, completing initial evaluation through cost-effective exploration to establish drill targets, and ultimately securing joint venture partners to fund drilling and advanced exploration. Shareholders are exposed to the upside of a significant discovery without the dilution associated with funding the highest-risk drill-based exploration.
Among the Company’s asset portfolio, key assets include the Organullo Gold project, a 100%-owned property in which Yamana Gold Inc. is earning an initial 70% interest through various work commitments and cash payments.
Keith J. Henderson, P.Geo., is the Company’s qualified person as defined by NI 43-101 and has reviewed the scientific and technical information that forms the basis for portions of this news release. He has approved the disclosure herein. Mr. Henderson is not independent of the Company, as he is an employee of the Company and holds securities of the Company.
Bunker Hill Mining Corporation (CSE:BNKR) is pleased to announce ... READ MORE
Gabriel Resources Ltd. (TSX-V:GBU) is pleased to announce an init... READ MORE
Radisson Mining Resources Inc. (TSX-V: RDS) (OTC: RMRDF) is pleas... READ MORE
Ximen Mining Corp. (TSX-V:XIM) (FRA:1XMA) (OTCQB:XXMMF) is please... READ MORE
RNC Minerals (TSX: RNX) is pleased to announce that mining is und... READ MORE