First Majestic Silver (NYSE:AG) (TSX:FR) has completed the sale of the past-producing Plomosas silver project in Mexico to GR Silver Mining (TSX-V: GRSL), in a deal that gives the Canadian miner a 19.9% stake in the Vancouver-based junior.
GR Silver paid C$100,000 and granted a subsidiary of First Majestic a 2% net smelter return (NSR) royalty on Plomosas with half of the NSR being subject to a buy-back option for $1 million.
The project is located within 5 km of GR Silver’s San Marcial asset in the Rosario mining district of Sinaloa, near the historic mining town of La Rastra. Quartz-sulphide silver-gold-lead-zinc mineralization were discovered in the area in the 16th century.
Limited mining activity was conducted intermittently from 1950 to 1989, when a 600 tonne-per-day underground mine began operations following the development of a flotation process concentrating lead, zinc, silver and gold ores.
The Plomosas project also comes with four targets at drilling/resource stage, 16 exploration targets, 30 km of under-explored mineralized veins/structures, and an extensive drill and exploration database, including in excess of 500 recent and historical drill holes.
“This transaction is in line with our growth strategy and vision of becoming a leading mining company controlling the most important silver-gold assets in the Rosario mining district,” GR Silver Mining president and CEO, Marcio Fonseca, said.
The Plomosas mine operated from 1986 to 2000, processing 2.5 million tons in a crushing-milling flotation circuit.
First Majestic acquired the project in 2012.