Para Resources Inc. inked a memorandum of understanding with Mining and Solutions Construction Group SA, or MISCON, under which Para agreed to acquire up to a 75% interest in the latter's Finaris gold-silver mine and concessions as well as the Las Lomas de Casma processing plant, in Peru.
Under the terms, Para agreed to invest between US$5 million and US$7 million in improvements and expansion of the assets to increase production, subject to due diligence.
Upon completion of the project, Para will earn up to a 50.1% interest in the assets.
Para may earn an additional 25% interest upon the achievement of mutually agreed-upon production goals and other milestones, to be set at the end of due diligence.
Upon Para earning a 75% stake, MISCON will have the option to sell the remaining 25% interest to Para at fair market value.
The initial mine plan by MISCON outlined a target resource of 300,000 ounces of gold at 10.1 g/t and 500,000 ounces of silver, based on 591 meters of development mining in galleries in only the Milagros-1 vein.
The Finaris mining concession includes a permit for the construction of an additional 200 tonnes per day of gold processing plant that could be upgraded to 350 tpd with an additional permit.
In addition, the Las Lomas de Casma plant at Casma property has a current capacity of about 50 tpd output but is permitted for 150 tpd.
Prior to the signing the definitive agreement, the parties will agree on the pre-money valuation of MISCON and the relative value of the capital, equipment and expertise to be applied by Para to the project.