Magellan Gold Corp. struck a deal to acquire Ingenieros Mineros SA de CV's El Dorado gold-silver property located about 50 kilometers south of the former's SDA flotation plant in Mexico.
The company will make staged payments totaling US$800,000 over two years as part of the deal. It also agreed to pay an additional US$120,000 in cash and shares to acquire a comprehensive El Dorado data package comprising diamond drill core and technical information.
Magellan will have the right to begin production during the term of the agreement. The company intends to focus on advancing the 50-hectare concession toward production.
The company initiated permitting and is selecting an underground mining contractor. It plans to truck the ore from El Dorado to the SDA plant for processing.
Magellan CEO Pierce Carson said in an Aug. 13 release that the resources at El Dorado, if confirmed, could supply ore to the SDA mill for about five years at a mining rate of 100 tonnes per day.
"Acquisition of El Dorado is a key step in our strategy of initiating and then increasing production through the mill," Carson said. "To achieve these objectives, we are considering all financing options, including joint development with a suitable partner."