Colibri rallies on news of $3.6 million Mexican gold asset sale
Colibri Resource Corp. [CBI-TSXV] has announced a definitive deal to sell its remaining 49% interest in the Pilar Gold & Silver Project in Sonora, Mexico to partner Tocvan Ventures Corp. [TOC-CSE, TCVNF-OTCQB, TV3/A2PE64-WKN] for $3.6 million cash.
The transaction is expected to significantly strengthen Colibri’s financial position while allowing shareholders to retain long-term exposure to the Pilar Project through the retained 1.0% net smelter return royalty. Proceeds are expected to provide the company with increased flexibility to advance its wholly-owned EP Gold Project and broader exploration portfolio in Sonora, while continuing to evaluate additional exploration and development opportunities.
Under the terms of the agreement, Colibri will receive $3.6 million in cash, consisting of $2.0 million, payable on closing and $1.6 million within 12 months of the closing date. In addition, Colibri will retain the NSR royalty, which Tocvan can repurchase for a one-time cash payment of $1.0 million.
Colibri shares advanced on the news, rising 13.6% or $0.015 to 12.5 cents. The shares trade in a 52-week range of 32 cents and $0.08
Tocvan was unchanged at 60 cents. The shares trade in a 52-week range of $1.29 and 45 cents.
At its flagship Gran Pilar Project, Tocvan now holds a 100% interest in over 21 square kilometres of prospective ground, including a 50,000-tonne pilot production facility.
“This acquisition represents a major milestone for Tocvan, and our shareholders,’’ said Tocvan CEO Brodie Sutherland. “Eliminating any joint venture ownership of the Main Zone area simplifies our ownership structure, streamlines decision making and allows us to fully optimize development plans as we advance toward pilot production and resource definition,’’ he said. “With 100% ownership of the entire project, we are better positioned to capture the full upside of Gran Pilar’s significant exploration potential and near term production opportunity.’’
Colibri will now focus on its wholly-owned EP Gold Project hosts multiple high-priority target areas across a broader district scale land package, several of which have already returned encouraging results supporting the company’s belief that the project has the potential to host one or more significant gold zones, while numerous additional targets remain.
Recent drilling which has been previously reported by the company at the Plomo Claims within the EP Gold Project returned several notable near-surface gold intercepts, including 7.5 metres of grade 2.92 g/t gold from 6.0 metres, including 1.5 metres of grade 9.95 g/t gold, and 30.0 metres of grade 0.73 g/t gold from 3.0 metres, including 1.5 metres of 7.51 g/t gold.
The EP Gold Project is strategically located within the Caborca Gold Belt of Sonora, and lies within and adjacent to extensive regional concession holdings of Fresnillo plc. The project is located approximately 25 kilometres east of Fresnillo’s La Herradura Mine, 8.0 kilometres from the Noche Buena Mine and approximately 17 kilometres north of Fresnillo’s Tajitos gold deposit.