FULL DISCLOSURE: Mercado Minerals is a sponsor of theDeepDive.ca.
Mercado Minerals (CSE: MERC) has set its sights on a corner of Durango, signing two letters of intent to bolt together adjacent silver-gold projects in Mexico’s San Dimas mining district.
The two properties, San Rafael and La California, sit side by side and would form a 4,617-hectare land package spanning more than 6.5 kilometres of cumulative strike along the Sierra Madre Occidental. That trend is the same one that hosts First Majestic Silver’s San Dimas mine, and the broader district has historically given up more than 766 million ounces of silver and over 11.1 million ounces of gold.
San Rafael is the smaller of the two at 1,004 hectares, but it comes with infrastructure most early-stage projects lack, including an airstrip, camp, and road access, plus a historical mine running four underground levels. The vein has been traced for over 2.8 kilometres, and historical underground chip sampling at the La Esperanza level returned 1.4 metres grading 316 g/t silver and 22.08 g/t gold.
La California is the larger holding at 3,613 hectares and the more underexplored of the pair. A short-lived mine operated there from 1912 to 1922, processing a modest 20 to 40 tonnes of material a day, and only a sliver of the two kilometre mineralized structure has ever been touched. A historic channel sample returned 2.5 metres of 380 g/t silver and 1.28 g/t gold. Mercado also noted that the property has never seen systematic modern exploration.
Under the terms of the LOI’s, both projects can be earned to 100% interest through five-year option agreements totalling roughly C$5.6 million in cash, with the heavier payments pushed toward the back end. There are no royalties or net smelter return obligations attached. No further details were provided as of yet on the terms.
WATCH: Why This Mexico Silver Project Still Has Room to Grow | Daniel Rodriguez – Mercado Minerals
Chief Executive Officer Daniel Rodriguez framed the deals as the kind of opportunity the company has been hunting for, stating, “Putting together land packages of this size in the San Dimas mining district – where hundreds of millions of ounces of silver have been discovered and mined – across two strategically positioned properties is the right kind of transaction to create value for our shareholders,” he said.
Mercado Minerals last traded at $0.15 on the CSE.
FULL DISCLOSURE: Mercado Minerals is a client of Canacom Group, the parent company of The Deep Dive. Canacom Group is currently long the equity of Mercado Minerals. The author has been compensated to cover Mercado Minerals on The Deep Dive, with The Deep Dive having full editorial control. Not a recommendation to buy or sell. We may buy or sell securities in the company at any time. Always do additional research and consult a professional before purchasing a security.
