Kuya Silver (CSE:KUYA) has signed a letter of intent to acquire the owner of a permitted processing plant that processes its mineralised material to produce silver and other metal concentrates in Peru.
The Planta de Procesos Camila is currently operating at 150 tonnes per day, with plans to increase production capacity to between 300-350 tonnes per day, which Kuya Silver expects to tackle after closing the acquisition. The plant is located 164km from the company’s Bethania Silver Project in Peru.
Under the letter of intent, Kuya Silver will pay C$7.8 million ($8.22 million) for the owner of the Camila plant, subject to certain conditions such as completing due diligence.
Kuya Silver says preliminary analysis indicates a clear and capital-efficient path to expanding the plant’s capacity from 150 to 300-350 tonnes per day. Based on internal estimates provided by Camila and reviewed by Kuya Silver, this expansion is forecast to require C$700,000 to C$1 million of additional capital investment.
The company notes this deal advances its strategy to develop in-house processing capacity to vertically integrate its operations, capture operating synergies, de-risk and expand its platform for silver production growth.
The Bethania Silver Project encompasses 4,500 hectares and includes the Bethania Mine and Carmelitas property. Historically, the project produced silver-lead and zinc concentrates from the run-of-mine material until being placed on care and maintenance due to market conditions and lack of working capital.
Kuya silver is a mineral developer focused on two district-scale silver projects in Canada and Peru.
Write to Aaliyah Rogan at Mining.com.au
Images: Kuya Silver
