ePower Metals (TSXV: EPWR) announced that it has entered into a binding letter of intent with Minera Alamos for the assignment of the option to earn a 100% interest in the Los Reyes gold project located in the northwestern state of Sinaloa, Mexico.
In a press release, the Vancouver-based miner explained that the LOI stipulates a 30-day period to enter into a definitive agreement.
At present, Minera Alamos (TSXV: MAI) has the right to acquire a 100% interest in Los Reyes, pursuant to an option agreement entered into with Vista Gold Corp.
If the transaction goes through, ePower says it will change its name to “Prime Mining Corp.” and will focus its resources on the immediate development of Los Reyes.
“Los Reyes is an exceptional opportunity for exploration and potential development, to be fast-tracked through a PEA and a construction decision with low capital expenditure and reduced technical risks,” Andrew Bowering, ePower’s incoming CEO, said in the media brief. “The company will work to complete a PEA technical study on the project while continuing to drill to expand existing data as well as promising new targets.”
To acquire Minera Alamos’ interest in Los Reyes, ePower must make a cash payment of $1.5 million and assume Alamos’ remaining option payments of $3 million; issue 9,450,000 post-consolidation common shares and 3,350,000 common share purchase warrants entitling Minera Alamos to acquire further post-consolidation common shares; enter into a governance agreement, among other conditions.
Located 43 kilometres southeast of the mining centre of Cosala, Los Reyes has a mining history that stretches back into the 1700s and has seen mining activity as recently as the 1980s.
According to ePower, recent development work has focused on conventional milling and carbon in leach extraction of gold and silver.
Previously known as Guadalupe de los Reyes, the underground mine opened in the late 1800s and to date is the most significant source of gold production in the district. It is estimated to have produced 500,000-600,000 oz. gold and 40 Moz. silver at reported grades of +10 g/t Au and +500 g/t Ag.