Silver Mines (ASX:SVL) is expanding its footprint in San Bernardino County in California, acquiring California Silver for its Calico North Project, as well as entering a binding agreement over Lustrum Gold’s Kramer Hills Project.
The company will pay US$600,000 ($923,327) cash with 39 million shares in exchange for the Calico North Project.
To complete the transaction, Silver Mines will be required to meet all approvals where applicable.
Silver Mines will also be able to earn up to 80% interest in the Kramer Hills Project for another US$600,000, along with the allocation of 23.5 million shares, which will be in voluntary escrow for 12 months from commencement date.
The company will earn an initial 50% of interest in the project after funding US$3.5 million towards exploration expenditure and property maintenance, and a cash payment of US$1.25 million and US$1.5 million worth in shares within 60 days of satisfaction.
The share price will be equal to the 10-day volume weighted average price (VWAP).
Silver Mines can earn the remaining 30% interest within the 60 days if the company issues a further $2 million shares under the same stipulations.
Managing Director Jo Battershill says the company is committed to advancing its flagship project while progressing both assets with geological assessments.
“These projects provide Silver Mines with a substantial foothold in a highly endowed region and fit perfectly with our preference for brownfields targets with high potential, in safe jurisdictions and with minimal balance sheet impact,” Battershill says.
“The Calico North Project ticks a lot of boxes for us. There are extensive zones of silver-barite mineralisation with recent rock chips samples returning high grades, close to historical mines that produced over 20 million ounces of silver, with almost no exploration conducted over the last 100 years.”
The Calico North Project is located in the Mojave Desert in southern California, in the same region as Rio Tinto’s (ASX:RIO) Borax Mine and Equinox Gold’s (ASX:EQN) Castle Mountain Mine.
Spanning 48km2 at the historical Shaherald Property, exploration and mining at the Kramer Hills Project dates back to the early 1900s.
Write to Maddison Elliott at Mining.com.au
Images: Silver Mines
