Tarachi Gold Signs Purchase Agreement for the Magistral Mill and Tailings Project in Durango, Mexico
Details of the
- 1,000 TPD Merrill-Crowe tailings reprocessing plant and tailings disposal facility.
- Access to an estimated 1.3 million tonnes of tailings material with a historic average grade of between 2.06 and 2.11g/t Au (Unpublished 2018 PEA). A qualified person has not done sufficient work to classify the historical estimate as a current mineral resource.
The Magistral Projectis accessible by paved highway, 175km from Parral, Chihuahua and approximately 5km north of the town of Santa Maria del Oro(pop. 5,000).
Final terms of the Purchase Agreement are in line with the original Letter of Intent dated
- Consideration for the Acquisition will consist of issuing 4,000,000 common shares of Tarachi ("Common Shares") to Manto.
- The Company will grant Manto a 15% net profits royalty on the estimated 1.3 million tonnes of tailings material expected to be processed and reimburse Manto for
US$1,179,500of cash outlays.
- The Company will satisfy certain obligations of Manto by paying a total of approximately
US$1,111,000plus any Mexican value added tax (IVA) and issuing 1,685,916 Common Shares within 90 days of closing.
- Manto will be entitled to the following staged bonus payments:
- An additional 4,000,000 Common Shares 60 days after the Closing Date.
- 4,000,000 Common Shares 180 days after the Closing Date.
- 4,000,000 Common Shares 365 days after the Closing Date.
US$500,000in cash following 6 months of commercial production at Magistral.
US$500,000in cash following 12 months of commercial production at Magistral.
- Upon the Company earning
US$15,000,000in revenue from Magistral, the Company will pay Manto US$1,000,000.
- A finder's fee of 1,000,000 Common Shares will be issued to
Spirit Exploration Corp.
Next Steps for Magistral
- Closing of the acquisition of the Magistral project.
- Engage Ausenco Engineering to begin work on a Preliminary Economic Assessment ("PEA") and determine final optimal plant flowsheet.
- Commence a sampling program of the tailings resources to provide material needed for metallurgical test work and resource modelling as part of the PEA.
- Complete an audit of the existing environmental and operating permits to ensure the mill and tailings disposal facility are fully compliant and permitted prior to commissioning.
- Continue the constructive dialogue and supportive relationships that Manto's team has already established with the local community members and
- Work with the Company's in-country partners to identify and secure additional tailings resources in the area with potential to extend the life of the Magistral project.
In addition to the acquisition, the Company will enter into a services agreement with Minerales de Tarachi ("MDT") to leverage their in-country expertise by providing skills and management assistance in getting the Project up and running smoothly. Manto and MDT will also assist the Company through a cooperative agreement to identify and acquire other potential resources in the
Stock Option Grant
The Company has granted stock options to directors, officers, employees and consultants of Tarachi, under the Company's stock option plan. An aggregate amount of 380,000 stock options have been granted with an exercise price of
SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS
This news release includes certain "Forward–Looking Statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and "forward–looking information" under applicable Canadian securities laws. When used in this news release, the words "anticipate", "believe", "estimate", "expect", "target", "plan", "forecast", "may", "would", "could", "schedule" and similar words or expressions, identify forward–looking statements or information. These forward–looking statements or information relate to, among other things: the potential pathway to production; the generation of positive cashflow; closing of the Magistral acquisition; the development of Magistral; and future mineral exploration, development and production.
Forward–looking statements and forward–looking information relating to any future mineral production, liquidity, enhanced value and capital markets profile of Tarachi, future growth potential for Tarachi and its business, and future exploration plans are based on management's reasonable assumptions, estimates, expectations, analyses and opinions, which are based on management's experience and perception of trends, current conditions and expected developments, and other factors that management believes are relevant and reasonable in the circumstances, but which may prove to be incorrect. Assumptions have been made regarding, among other things, the price of silver, gold and other metals; no escalation in the severity of the COVID-19 pandemic; costs of exploration and development; the estimated costs of development of exploration projects; Tarachi's ability to operate in a safe and effective manner and its ability to obtain financing on reasonable terms.
These statements reflect Tarachi's respective current views with respect to future events and are necessarily based upon a number of other assumptions and estimates that, while considered reasonable by management, are inherently subject to significant business, economic, competitive, political and social uncertainties and contingencies. Many factors, both known and unknown, could cause actual results, performance or achievements to be materially different from the results, performance or achievements that are or may be expressed or implied by such forward–looking statements or forward-looking information and Tarachi has made assumptions and estimates based on or related to many of these factors. Such factors include, without limitation: the Company's dependence on one mineral project; precious metals price volatility; risks associated with the conduct of the Company's mining activities in