Kootenay Silver (TSXV: KTN) announced that its wholly-owned Mexican subsidiary entered into an option agreement to acquire a 100% interest in the Columba silver project, which hosts a past-producing mine and is located in the northwestern state of Chihuahua, Mexico.
Under the terms of the agreement, Kootenay Silver can acquire a 100% ownership in the concessions by making staged payments of $3.29 million over a 4-year period. The company would also have to fulfill a work commitment of $250,000 by the first anniversary and of $750,000 by the second anniversary of the agreement. The vendors will retain a 2% n.s.r. of which 1% can be purchased by the Canadian miner for $750,000.
“Columba is a very rare opportunity to get into a property with the potential for the discovery of classic high-grade Mexican style vein deposits. These opportunities only arise from the combination of depressed markets for silver and the success of our generative program to identify prospects,” Kootenay President and CEO, James McDonald, said in a media statement. “As we have seen in recent months, high-grade discoveries have added a lot of value to market cap to a handful of juniors. Based on our sampling and historic reports we believe that Columba has potential for such a discovery,” he added.
Columba is a past producing high-grade silver mine, which operated from 1900 until 1910 when work ceased in the region due to the Mexican Revolution. Following the historic event, the property has never been systematically explored in modern times.
According to Kootenay, the mine site covers a large, high-grade silver epithermal system comprised of numerous veins, which the company has mapped over strike lengths from 200 meters to up to 2 kilometres. Recent channel sampling on these veins returned widths of 0.5 to 6 meters and carried grades of up to 692 gpt silver.
“Mineralization at Columba is textbook low to medium sulfidation epithermal vein hosted, displaying the classic zonation from non or weakly anomalous silver at high elevations that increase with depth into the classic high-grade zones that make them such profitable deposit types,” McDonald added in the media brief.