Magna Gold Corp. (TSX-V: MGR) (OTCQB: MGLQF) is pleased to announce that the Company and Molimentales del Noroeste, S.A. de C.V. a subsidiary of the Company, have closed the acquisition of the option to acquire a 100% undivided interest in the mining concessions comprising the Margarita Silver Project pursuant to a definitive option acquisition agreement with Sable Resources Ltd. and Exploraciones Sable, S. de R.L. de C.V. a wholly-owned subsidiary of Sable. Immediately following the Acquisition, the Purchaser exercised the Option to acquire the Property. The Property is comprised of two mining concessions, covering 125.625 hectares, located within the prolific Sierra Madre Gold Belt, which hosts numerous multimillion-ounce gold-silver deposits, 88 kilometers south of the state capital of Chihuahua in the Municipality of Satevo, State of Chihuahua, Mexico. The Property lies 15 kilometres northwest on strike with Sunshine Silver Corp.’s Los Gatos Mine.
Pursuant to the terms of the Agreement, the Purchaser acquired the Option in exchange for: (i) CAD$1,500,000 in cash, plus an additional CAD$800,000 in cash representing Mexican VAT; and (ii) CAD$3,500,000 in common shares in the capital of Magna, being 3,219,278 Magna Shares at a deemed price of $1.0872 per Magna Share, representing the volume weighted average price of the Magna Shares on the TSX Venture Exchange for the fifteen trading days prior to the date of the Agreement. Immediately following the Acquisition, the Purchaser exercised the Option to acquire the Property by payment to the titleholders of the Property of: (i) CAD$500,000 in cash, plus an additional $368,000 in cash representing Mexican VAT; and (ii) CAD$1,800,000 in Magna Shares, being 1,655,629 Magna Shares at the Issue Price.
The Magna Shares issued in connection with the Acquisition and the Option Exercise are subject to a four-month hold period in accordance with applicable Canadian securities laws which will expire on March 18, 2021.
Concurrent with the Option Exercise, in accordance with the terms of an amended and restated royalty purchase agreement dated October 13, 2020 between Osisko Gold Royalties Ltd Sable, the Vendor and certain affiliates of Sable and the Vendor, the Company and the Purchaser have entered into a royalty agreement with Osisko, pursuant to which the Purchaser will pay Osisko a 2% net smelter returns royalty on all products mined and produced from the Property.
For more information about the Property, please refer to the Company’s news release dated November 10, 2020.
About Magna Gold Corp.
Magna Gold Corp. is a Canadian gold company engaged in operations, development, exploration and acquisitions in Mexico. Its primary asset is the producing San Francisco gold mine in Sonora, Mexico and exploration stage projects include San Judas, La Pima and Mercedes.
The Company’s shares trade on the TSXV and OTCQB. Magna is well integrated into its nearby communities, employs local residents, and uses local services when possible.
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