Candente Gold Corp. has announced that Sun River Gold has completed the final payment of US$111,000, to increase their ownership in the Mexico Mine Tailings at El Oro Mexico.
With this payment, Net Profits Interest (NPI) of Candente Gold will be reduced from 10% to 5% once it receives the payment of the first US$1,500,000.
The Mexico Mine Tailings include an Inferred Resource of 1,267,400 tonnes that grade 75.12 Ag g/t and 2.94 Au g/t, comprising 3,061,200 ounces of silver and 119,900 ounces of gold.
Through staged payments of US$300,000 (paid), Sun River has the option to purchase 100% of the Tailings Project, move the tailings to commercial production by October 31st, 2021, and grant a 10% NPI, Life of Mine royalty (or the “Candente Royalty”) to Candente Gold, along with the Municipality’s 8% NPI on production from the properties.
Sun River had the right to decrease the NPI payable to Candente Gold to 5% through additional payments of US$200,000 (which have now been paid).
CCM El Oro Jales, a subsidiary of Candente Gold, already signed an agreement with the El Oro municipality, according to which Candente Gold has the right to recover all available silver and gold from the tailings deposit and pay an 8% NPI to the El Oro Municipality.
Moreover, Candente Gold holds back the first US$1.5M from the 8% NPI payable to the Municipality. Sun River should make all its NPI payments to the Municipality.
Sun River, an Arizona-based private corporation, is managed by an expert team of mining professionals with a combined mining experience of 80 years in Mexico, which also includes specific experience in the reprocessing of old silver and gold tailings.
Sun River has notified Candente Gold that it has finalized a preparatory internal engineering study (or Internal Study) for the Mexico Mine Tailings Project, and that it plans to further the project’s development with the aim to enter into commercial production. Recently, Sun River informed Candente Gold about the below-mentioned key points in the project development:
- Sun River has signed a letter of intent and completed a down payment to acquire 25 ha of land close to the township of Nopalera, about 5km by road to the north of the existing location of the Mexico Mine Tailings, which is apt for plant site and residue storage.
- Sun River has predicted the project life to be 1 year of engineering and construction and 4 years of reclaim and processing of tailings material (at the rate of 1,000 tonnes per day), which will be followed by reclamation.
- Sun River informs that with reference to flotation test work conducted by a reputable, independent U.S. metallurgical lab, a standard metallurgical flotation process is predicted to recover 60% of the silver and 65% of the gold to a marketable concentrate.
- Sun River plans to market the silver/gold concentrate on the open market.
- Sun River plans to sign a contract with a local contractor, who will employ front-end loaders and dump trucks for tailings material reclamation and haul it to the suggested process plant located about 5 km away.
Jim Bradbury, partner in Sun River Gold and a Registered Professional Metallurgical Engineer in the State of Arizona, is regarded as the Qualified Person for the Internal Study content. The metallurgical test work was performed by Minerals Technology LLC, a reputable metallurgical testing laboratory based in Tucson, Arizona. Florence Copper, ASARCO, and BASF Mining Solutions are all clients of Minerals Technology LLC.