Cerrado Gold, a privately-owned Toronto-based mining and exploration company, announced that it has entered into a binding letter of intent with New Dimension Resources (TSXV: NDR) to acquire 100% of its Argentine subsidiary Minera Mariana Argentina S.A.
To go ahead with the deal, Cerrado Gold will have to pay a purchase price of C$2.25 million, payable in shares of Cerrado.
The main assets owned by Minera Mariana are the Las Calandrias and Los Cisnes projects, located in the southern Santa Cruz province. In total, the projects consist of approximately 60,400 hectares with the bulk of the landholdings on the property adjacent to Cerrado’s Minera Don Nicolás gold mine.
According to the Canadian miner, the acquisition of these projects implies the addition of 379,000 ounces of gold and six million ounces of silver in the indicated category and 42,000 ounces of gold and 401,000 ounces of silver in the inferred category, directly adjacent to Don Nicolás’ Escondido deposit.
“The additional gold resource base increases our total resource inventory in the region to just under one million ounces in Argentina,” Mark Brennan, Cerrado’s co-chairman and CEO, said in a media statement.
“This transaction will support, not only additional resources for the Don Nicolás mill but also support our ongoing review of the potential to use ore leaching of lower grade materials at the north of our property. We expect to complete these studies and complete an economic assessment early in the new year with the potential to increase our annual production rate by 20-30K ounces per year.”