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Be the first with the news that moves the market- Silver Dollar Resources (CSE:SLV) has signed a letter of intent with First Majestic Silver to acquire the La Joya Silver Project in Mexico
- Under its first option, Silver Dollar may acquire an 80 per cent interest in the property by paying First Majestic C$1.3 million cash, issuing 19.9 per cent of its shares and committing to $1 million in exploration
- For its second option, Silver Dollar may acquire the remaining 20 per cent by issuing another 5 per cent of its total outstanding shares
- A definitive agreement is expected to be negotiated within the next 60 days
- Silver Dollar Resources (SLV) is currently steady and is trading at 31 cents per share
Silver Dollar Resources (CSE:SLV) has signed a letter of intent with First Majestic Silver to acquire the La Joya Silver Project in Mexico.
Located roughly 75 kilometres southeast of Durango’s capital, the project sits in a prolific region of mineralisation.
Past-producing and currently operational mines include Grupo Mexico’s San Martin Mine, Pan American Silver’s La Colorada Mine and First Majestic Silver’s La Parrilla and Del Toro Silver Mines.
Under its first option, the company may acquire an initial 80 per cent stake in the La Joya Project by paying C$1.3 million to First Majestic over a four-year period and incurring $1 million in exploration expenses within the first five years.
Silver Dollar will also be required to issue First Majestic a number of common shares equal to 19.9 per cent of the outstanding amount at the time.
In addition, a two per cent net smelter return royalty will granted to First Majestic.
To acquire the remaining 20 per cent interest, Silver Dollar will be required to provide notice of its intention to do so within 30 days of earning the initial stake. The company will then need to issue an additional number of shares equal to five per cent of the total outstanding amount.
Should Silver Dollar not provide notice of its intention to execute the second option, the two companies will enter a joint venture.
Mike Romanik, President of Silver Dollar Resources, said the La Joya Project present a significant opportunity for the company.
“La Joya is an advanced exploration and development stage project that will provide our shareholders with tremendous leverage in a rising metals market. The property’s regional targets are of particular interest as they have never been followed up and their exploration potential remains untapped.
“The transaction also gives us an opportunity to work with First Majestic, one of the largest silver producers in Mexico,” he added.
Silver Dollar Resources (SLV) is holding steady and is trading at 31 cents per share at 11:16am EDT.
