Advance Metals (ASX:AVM) has entered a binding agreement with Endeavour Silver (TSE:EDR) to acquire a 100% whole interest in the Guadalupe y Calvo Project in Chihuahua State, Mexico.
Over a four-year term, Advance will be required to pay US$4 million ($6.13 million) in cash, exploration expenditure, and shares, priced at the 20-day volume weighted average price prior to issue.
Endeavour Silver will earn a 2% net smelter return over production at the project after completion of the earn-in requirements.
Managing Director Adam McKinnon says this acquisition marks a transformational milestone for the company, building its Mexican footprint to exceed over 100 million ounces silver equivalent.
“Advance is now positioned as the largest ASX participants in the silver-gold exploration and development space in Mexico, with enormous upside potential from all three of our projects,” McKinnon says.
“Along with silver, Guadalupe y Calvo adds significant high grade gold to our portfolio at a time of very strong demand and prices for both metals.”
The project has an estimated historical production of more than 2 million ounces of gold and 31 million ounces of silver, hosting around 86,000m of resource definition and exploration drilling.
Previous exploration returned intersections including 6.5m @ 3.6 grams per tonne gold and 3,646g/t silver from 38.5m, 3m @ 20.3g/t gold and 171g/t silver from 70m, and 1.95m @22.5g/t gold and 1,456g/t silver from 553m.
Guadalupe y Calvo Project hosts an indicated and inferred estimate of 9.5 million tonnes @ 2.7g/t gold equivalent containing 816,000 ounces gold equivalent.
“The company finds itself in a fantastic position to leverage off its operating expertise, existing infrastructure and established team in Mexico, with Guadalupe y Calvo conveniently located at the mid-point between Yoquivo to the north and Gavilanes to the south,” McKinnon adds.
Advance Metals is a gold and silver explorer focused on developing its assets in Australia and North America.
Write to Maddison Elliott at Mining.com.au
Images: Advance Metals
