- Golden Minerals (AUMN) has signed a letter of intent to sell its Santa Maria silver-gold project in Chihuahua State, Mexico, to Fabled Copper
- Fabled Copper will pay approximately C$5.43 million for the 100 per cent acquisition, and issue a one per cent net smelter return royalty on the project to Golden Minerals
- In October 2019, the company entered a similar agreement with Magellan Gold, but the deal expired prior to execution
- The transaction is expected to close within five business days of receiving final acceptance from the TSX Venture Exchange
- Golden Minerals (AUMN) is up 1.09 per cent and is trading at $0.48 per share
Golden Minerals (AUMN) has signed a letter of intent to sell its Santa Maria silver-gold project in Chihuahua State, Mexico, to Fabled Copper.
The advanced-stage exploration project covers a total of 101 hectares near the Parral District in southern region of the state and represents a potential source of near-term production with low associated development costs.
According to a Preliminary Economic Assessment completed in September 2018, the Santa Maria project could be transformed into a 4.2-year mining operation that would produce 3.13 million ounces of silver equivalents at an average grade of 331 grams per tonne.
Under the terms of the agreement, Fabled Copper will pay approximately C$5.43 million in cash for the 100 per cent acquisition.
This will be made up of an initial $680,000 payment to be issued upon closing of the deal, along with one million common shares. Fabled Copper will also pay roughly $2.04 million and $2.72 million in cash on the dates that are 12 and 24 months after closing, respectively.
In addition, Golden Minerals will be granted a one per cent net smelter return royalty on the Santa Maria and Punto Com concessions.
Fabled Copper will have a 10-day period to complete its due diligence, after which the details of the transaction will be submitted to the TSX Venture Exchange for approval.
The transaction is also dependent of Fabled Copper completing an equity private placement of at least $4 million and the delivery by Fabled of an acceptable geological report to the TSX Venture Exchange.
Golden Minerals entered into a similar agreement with Magellan Gold in October 2019, under which Megallan had a 150-day period to complete its due diligence and secure funding for the acquisition. However, the deal expired prior to its execution.
Golden Minerals (AUMN) is up 1.09 per cent and is trading at 48 cents per share at 11:12am EDT.