Minera Alamos buys Cerro de Oro gold project in private sale

Canada’s Minera Alamos (TSX-V: MAI) is expanding its footprint in Mexico by acquiring the Cerro de Oro gold project in the north-central state of Zacatecas, its third asset in the precious metals-rich country.

The private transaction was conducted with a vendor group known by the Minera Alamos team following negotiations that were carried out over the last few months. As part of the deal, the Toronto-based junior gains full ownership of the new asset in exchange for share and cash payments scheduled over a four-year period, totalling 4 million shares of Minera Alamos. The company is also paying the vendor US$2.9 million in cash.

The acquisition comprises two claims, Zacatecas I and Zacatecas II, and boosts the company’s claim holdings in the Concepcion del Oro district to about 65 square kilometres. The two concessions are bounded by existing ones held by Minera Alamos. The package is surrounded by a larger claim that is also owned by the company, which it says provides the necessary land to develop the deposit.

“The Cerro de Oro gold project has many characteristics that mimic the El Castillo gold mine our team developed under the Castle Gold Corporation banner from 2007 until its eventual sale in 2010,” chief executive Darren Koningen said in a press statement. “Northern Zacatecas has a rich mining history and hosts some of the largest gold deposits in north-central Mexico.  We look forward to working with the local community and Mexican mining authorities to rapidly advance permitting and establish a new mine in the district.”

Kerry Smith, an analyst at Haywood Research, believes Cerro de Oro has many positive features. Among them, near surface mineralization that is open in multiple directions, historical drilling that will support a maiden resource estimate, a low strip ratio and good metallurgical characteristics for an oxide heap leach project.

Cerro de Oro adds to Minera Alamos’ 100%-owned Santana and La Fortuna assets located in Sonora and Durango states, respectively.

Santana is an open-pit, heap-leach development project currently under construction, with mining targeted to commence in early 2021. Initial production will be 25,000-30,000 oz. per year. The company says that La Fortuna, also an open-pit gold project, is nearing the end of the permitting stage, and a construction decision on it would be made later this year or in early 2021.

Some known large-scale mines located nearby include Newmont’s (TSX: NGT; NYSE: NEM) Peñasquito, Aura’s (TSX: ORA) Aranzazu, Fresnillo’s (LSE: FRES) Noche Buena and Orla’s (TSX: OLA) Camino Rojo.

— A version of this article first appeared in our sister publication, MINING.com.