Taking advantage of recent changes in Mexican mining law, Silver Standard Resources (VSE) has acquired an option to purchase the Mexican owner of the La Choya gold property in northern Sonora, Mexico. Currently owned by Cia Minera Desierto Dorado, the La Choya property is estimated to contain a minable open pit reserve of 1.9 million tonnes grading 1.51 grams gold per tonne. The deposit remains open in all directions and there is excellent potential to double or triple the reserve, according to Silver Standard, a Teck affiliate.
Under recent revisions to the Mexican mining law, foreign investors are allowed to control 100% of a mining project for up to 12 years.
During the option period, Silver Standard must complete 4,000 metres of drilling and pay Aztec Mining Co., Dominion Gold Mines and certain Mexican citizens US$65,000. Upon exercising the option, the Vancouver junior must pay US$1 million and within 12 months, another US$1 million. At that point, Aztec and Dominion would receive an 18% equity position in Silver Standard, and Silver Standard would control 100% of Desierto Dorada, including 51% through the new 12-year trust arrangement.
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