In a news release, Magna Gold Corp. (MGR:TSX.V; MGLQF:OTCQB) announced that it and its subsidiary Molimentales del Noroeste agreed to acquire the Margarita silver project in Chihuahua, Mexico, from Sable Resources. The two-part transaction is due to close on or around Nov. 16, 2020.
"Acquiring the property gives the company exposure to a potential high-grade silver project and additional optionality to rising silver prices," Magna Gold President and CEO Arturo Bonillas said in the release.
For the option to acquire Margarita, Magna Gold will pay Sable Resources CA$1.5 million in cash plus CA$800,000 in cash representing Mexican value-added tax (VAT). Also, it will issue Sable CA$3.5 million worth of Magna shares, which is 3,219,278 shares at $1.0872 apiece.
Then, after the acquisition closes, Magna will exercise the option to acquire the property. It will do so by paying the titleholders of the property CA$500,000 in cash and CA$368,000 in cash representing Mexican VAT and issuing them CA$1.8 million worth of Magna shares.
The Margarita project encompasses two mining concessions that cover 125 hectares in the Sierra Madre Gold Belt. The property sits 15 kilometers to the northwest of Sunshine Silver's Los Gatos mine.
"Margarita displays an outcropping high grade core zone 2 meters to 14 metres in width, and 14 meters to 60 meters lower grade halo that continues at least to 100 meters of depth, at elevations of 2,000-2,100 m.a.s.l., with clear upside potential down dip the structure as evidenced by the high grade sulphide rich mineralization as at the nearby Los Gatos Mine, where the top of the mineralized zone is at an elevation of 1,500 m.a.s.l. Further upside potential exists in undrilled gaps along the upper levels of Margarita, and in the other four known veins. Acquiring the property gives the company exposure to a potential high-grade silver project and additional optionality to rising silver prices," commented Arturo Bonillas, Magna's president and CEO.
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