Atico Mining Corp. [ATY-TSXV, ATCMF-OTCQX] said Friday its has acquired the remaining 40% interest in the La Plata gold-copper-zinc volcanogenic massive sulphide deposit in Ecuador in a US$10 million deal.
The acquisition was completed via a share purchase agreement involving Atico’s Toachi Mining unit, Atico, and certain shareholders of the company that owns the La Plata concessions.
Atico said it has agreed to make an initial cash payment of US$7 million, plus three additional US$1.0 million installment payments on each anniversary of the closing date for three years.
A portion of the shares will be subject to pledge agreements with the sellers, whereby the pledged shares will be released over three years upon payment of the installments.
Atico shares were unchanged at 45 cents and currently trade in a 52-week range of 78 cents and 38.5 cents.
The La Plata property consists of two mining concessions, La Florida and Loma del Tigre, which cover 2,300 hectares and is located 85 kilometres southwest of the capital city of Quito. Total driving time in a four-wheel light truck is about three hours from Quito.
Atico said the deal was driven by its desire to consolidate ownership of a project it is already committed to advancing through to production as well as by the perception that the Ecuadorian government is creating a favourable environment for investment in the mining sector.
Previous operators, including Cornerstone Capital Resources Inc. [CGP-TSXV, CTNXF-OTC, FWB-GWN1] outlined a “historic resource” of 914,000 tonnes, grading 8.01 grams gold, 88.29 grams silver, 5.01% copper, 6.71% zinc and 0.78% lead per tonne. The property was also drilled by a Canadian company previously known as Cambior Inc. between 1996 and 2000.
In October, 2015, Toachi Mining, previously known as Ferrum Americas Mining Inc., secured an option to earn between 60% and 75% in the La Plata project.
Ferrum was a shell company led by Laurence Curtis an economic geologist and geochemist, who has been in the mining industry for 40 years, including 10 spent as CEO of Australian gold producer Intrepid Mines Ltd.
Aside from the impressive grades, the La Plata project offers multiple advanced exploration targets defined by coincident geochemistry, geology, and geophysics, as well as an exploration database that includes records from 14,000 metres of drilling.
Toachi previously said its exploration staff identified more than 14 discrete exploration targets across the property concessions which extend for more than nine kilometres, attesting to the potential of this emerging district, the company said.
The La Plata project is located 15 kilometres from the Toachi River, which flows through the Andean foothills and provides water and immense power for hydro plants. It was a venue for small scale mining (open pit and underground) between 1975 and 1981.