Patagonia Gold Plc, the mining company with gold and silver projects in the southern Patagonia region of Argentina, Chile and Uruguay, has signed a Definitive Agreement to acquire the Calcatreu Deposit from Pan American Silver Corp. by way of acquiring all shares of a wholly-owned subsidiary of Pan American, for a total consideration of US$15 million.
Patagonia Gold was granted an exclusive option to purchase the Calcatreu deposit as initially announced on 24 April 2017.
Pursuant to the Definitive Agreement, Patagonia Gold will make an initial payment of US$5 million upon closing of the acquisition, which is expected to take place on or before 31 January 2018 subject to certain customary closing conditions. The US$5 million will be paid from the recently completed fundraising announced on 8 December 2017. The remaining US$10 million is due on 18 May 2018 and will be settled using a combination of funds from the recent fundraising and the company's existing cash resources.
Patagonia Gold intends to advance the Calcatreu project during 2018 by exploring the area immediately around the existing resource with the aim of increasing the resource. The company is confident that there remains significant potential to increase the existing resource base and believes that approximately 12 - 18 months will be required to generate and drill off known targets. The system has a known strike length of over 8 km and the company believes that this may well increase with an improved knowledge of the system and more detailed geophysical and geochemical surveys which the company intends to undertake on completion of the acquisition. The company has the financial resources necessary to progress the project following the recent fundraising.
According to Patagonia Gold, further announcements will be made as the drilling programme progresses.