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Fortuna Silver exercises right to option Prospero Silver's Pachuca SE project

Fortuna Silver Mines Inc. exercised its right for an option to acquire up to a 70% interest in Prospero Silver Corp.'s early stage Pachuca SE silver-gold property in Mexico.

The companies entered an agreement in April 2017 to combine efforts in Mexico. Fortuna Silver committed to invest C$1.5 million in Prospero Silver, which planned to use the bulk of the proceeds for drill testing, including at Pachuca SE.

In May, the two companies amended the agreement to enable funding for 2018 drilling, with changes including a reduced exercise price for Prospero Silver warrants included in the deal and a Nov. 30 deadline for Fortuna Silver to exercise its option rights.

Prospero Silver said Dec. 10 that Fortuna Silver can acquire the 70% interest by spending US$8 million, including US$1 million in the first year, and completing a preliminary economic assessment.

Work is expected to kick off in January 2019, subject to a definitive option and joint venture agreement.