Apogee scoops up Bolivian prospects

Toronto-based Apogee Minerals (APE-V) has entered into a joint venture to explore the historic Santa Isabel silver-lead-zinc mineralized system in Bolivia.

Santa Isabel is a 2-sq.-km concession in the Potosi department’s San Antonio de Lipez district, near the Argentine border.

To earn its first 51% interest in the project from a private vendor, Apogee must pay US$1.1 million, issue 100,000 shares, and spend a minimum of US$250,000 on exploration in year one, US$500,000 in year two, and US$1 million in year three.

In the fourth year, Apogee can earn another 44% by paying an additional US$1 million and spending another US$1 million on exploration or development.

Santa Isabel’s current owner is still indebted to the Bolivian government’s mineral exploration department to the tune of US$1.25 million. But this debt is payable from production, and Apogee has the right to deduct any payments from its required exploration expenditures.

Apogee notes that its counsel in Bolivia believes that Santa Isabel’s owner has a “strong case for the debt to be forgiven,” as the agreement with the government states that the debt would only be payable if a study completed by the government (some 20 years ago) resulted in a profitable operating mine, which Apogee says was not the case at the time.

The deal at Santa Isabel comes just weeks after Apogee agreed to acquire a private Bolivian company named Forbes Manhattan Bolivia, which has the right to earn interests in three separate silver projects in the country: Buena Vista, Tiawanku and Jaquegua. Like Santa Isabel, all three have been mined for silver since the 16th century, with miners exploiting classic Bolivian polymetallic veins of silver, tin, gold, zinc, lead, antimony, tungsten and bismuth.

Better-known deposits in Bolivia exhibiting this style are Newmont Mining‘s (NEM-N) Kori Kollo, and Apex Silver Mines‘ (SIL-X) San Cristobal.

To acquire Forbes Manhattan Bolivia, Apogee will assume all of its rights and obligations, pay $200,000 in cash, and issue 1.5 million shares.

In April, Apogee raised gross proceeds of $300,000 by privately placing 2.5 million units priced at 12 apiece. Each unit comprises a share and a warrant entitling the holder to buy another share for 16 within two years.

Earlier this year, Stephen Woodhead and Tony Wonnacott joined Apogee’s board of directors, replacing James Golla and Thomas Holmes. A former executive with South Africa’s Trans Hex Group, Woodhead also became Apogee’s chief financial officer, while Wonnacott was appointed corporate secretary.

Apogee shares recently traded at 30 within a 52-week high-and-low range of 40-13. The company has 9.2 million shares outstanding.

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