Xiana Mining Inc. said May 30 that it secured an option to acquire the Santa Ines silver-lead-zinc mine in Peru from Compania Minera Santa Ines Y Morococha SA.
The mine, which includes a 2,000 tonne-per-day plant, operated for more than 70 years before it was placed on care and maintenance.
Under the terms, Minera Santa Ines will assign all of its right, title and interest in and to the mining concessions, property and assets of the Santa Ines mine to a Xiana subsidiary for an initial 20-year period starting in May, which can be extended for an additional 10 years subject to conditions. The company will also be given a six-month voluntary period to decide whether to continue or terminate the agreement.
Xiana is required to pay US$2 million within five days after the voluntary period and spend at least US$12.5 million on the concessions within four years.
Meanwhile, Minera Santa Ines will be entitled to a 4% net smelter returns royalty from the sale of mineral products from the concessions, to be received on a quarterly basis.
Xiana said it developed a work program for the property focused on identifying higher-grade zinc mineralization and evaluating other exploration targets on the property.
