Prime Meridian Resources (TSXV: PMR) is going to Mexico. The company announced yesterday, after nearly a full day’s trading halt, that it had entered into a letter of intent to acquire the historic La Verde Grande Mine in Sonora State, Mexico.
The purchase includes the historic mine as well as surrounding concessions, which is located in the central region of Sonora State. The property itself consists of nine concessions covering a total area of 2,493 hectares, with the mine historically focused on copper and silver, with the larger project containing a total of six copper-zinc-silver-gold skarn zones.
The mine was operated from 1903 to 1935, with mineralization typically found as oxides. A historic resource estimate conducted in 1989 meanwhile estimated that the mine had proven reserves of 256,956 tonnes grading out at 2.28% copper, 104 g/t silver and 0.35 g/t gold, while probable reserves of 152,595 tonnes were believed to contain 2.29% copper, 99 g/t silver and 0.38 g/t gold. A further 50,000 tonnes were classified as being indicated, at 2.29% copper, 98.54 g/t silver and 0.38 g/t gold.
The historic estimate was based on just 110 metres of strike. Comparatively, strike at the project as a whole is now over 2.0 kilometres long based on known mineralization.
Prime Meridian intends to immediately fast-track exploration as well as development of the property of the seven skarn zones, which includes the historic mine. The firm will concurrently focus on the possibility of finding copper porphyry mineralization within proximity of these zones.
In terms of infrastructure, the project is accessed via paved highway and gravel roads that terminate in the main historical workings found on the property. An abandoned plant site sits on the property, with power lines found nearby. Exploration is able to be conducted year round.
Commenting on the acquisition, Brian Leeners, CEO of Prime Meridian stated, “We have been financing and developing copper projects in Canada, the USA and Mexico for over 20 years and the opportunity at La Verde is the best I have seen over that time period, as it provides a potentially significant value proposition from the combination of a near-term production opportunity from the skarns and the exciting prospect of a new copper porphyry discovery in one of the world’s most productive copper belts.“
Prime Meridian can earn up to a 100% interest in the property via a series of payments. The first 5% interest is to come via a US$400,000 cash payment, followed by the issuance of 25 million common shares of the company for a further 45% stake. 25% more of the property can then be acquired for US$3.0 million in additional shares, while the final 25% can be acquired for a further US$2.0 million in common shares. The final two payments are to occur before the first and second anniversaries of the closing of the transaction, respectively. All shares issued are to be subject to three year escrow provisions.
Prime Meridian last traded at $0.12 on the TSX Venture.
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