Guanaco Compañía Minera SpA, the wholly-owned subsidiary of Austral Gold Limited, has agreed to acquire 12,500 hectares of mining concessions, part of the San Guillermo Project owned by mineral exploration company Revelo Resources.
The new properties are strategically located around the Amancaya property, which Guanaco acquired from Yamaha Gold in 2014. Austral said the acquisition was consistent with its strategy of consolidating precious metals exploration and development assets around its flagship Guanaco Mine.
“This is another positive step in expanding our Chilean asset base and it is in line with our well-defined growth strategy. Our team in Chile has unrivalled knowledge of the asset base in and around Guanaco, and this knowledge is helping us to build a very compelling portfolio of assets that will ultimately enable Austral Gold to significantly ramp its existing production levels,” said Dr Robert Trzebski, non-executive director of Austral.
“To that end, we are pleased with the work taking place to develop Amancaya while we are also assessing acquisition opportunities in Argentina which also offers additional scope for growth.”
The project is mainly prospective for low-sulphidation epithermal precious metals veins similar to those found at Amancaya and El Peñol. Previous exploration on targets across the San Guillermo property reported numerous drill intercepts, but much of the property remains unexplored.
Austral said the exploration program for the properties will be integrated with its program in the area which should lead to “significant synergies and the potential to rapidly develop economic discoveries”.
“The company is hopeful that the insight into the Amancaya mineralisation can be extended into these newly secured properties to allow for target generation and testing in a relatively short time frame,” Austral said in a statement.
The proposed transaction involves a staged investment over three years and is subject to satisfying three conditions for full ownership of the properties to be transferred to Austral:
- Work commitment of US$3 million over three years
- Cash payment of US$650,000 over three years
- Final optional cash payment of US$2 million subject to exploration results from the work commitment program
Austral said concessions comprising the properties are subject to royalty agreements providing royalty payments of between 1.5% and 4.5% of net smelter results, depending on the location of certain concessions within the properties. 0.5% will be made payable to Revelo, and the remainder will go to previous owners of the properties, with options available to reduce or exit the royalty agreement.