A letter agreement sets the stage for Metallica Resources (MR-T) to acquire the assets and property of a small former gold producer in Goias state of central Brazil.
The company says the Mara Rosa mine produced about 86,000 oz. gold from 1989 through to its closure in 1995. A small reserve of 75,000 contained ounces remains.
Metallica plans to buy the mine and its assets for US$1.5 million and begin a program aimed at confirming reserves and testing the property’s potential for additional resources.
The company sold to Euro-Nevada Mining (EN-T) a 1% net smelter return royalty on production from Mara Rosa. In return, Euro-Nevada must pay US$400,000 and surrender 100,000 warrants (the royalty can be increased to 2% by paying US$1.1 million).
Metallica continues efforts to raise the funds necessary for bringing the Cerro San Pedro gold-silver project into production. The Mexican project is expected to produced 143,000 oz. gold and 3.8 million oz. silver annually at an estimated cash cost of US$156 per oz. Capital costs are estimated at $68.2 million.
Metallica has expanded to more than 10,000 ha its land package near Cerro San Pedro. As a result, it now has rights to most of the district’s mineralized trend.
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