Silver Mountain up 14% on Peru mine land use agreement
Silver Mountain Resources Inc. [AMGR-TSXV] has signed 20-year surface land use agreement with the Community of Salcca Santa Ana in central Peru, marking the final approval required to restart operations at the company’s flagship Reliquias silver mine.
Silver Mountain shares advanced on the news, rising 13.7% or 19 cents to $1.57. The shares currently trade in a 52-week range of $1.85 and 50 cents.
The announcement comes after the company recently said it is in the final stages of negotiating a US$10 million pre-payment facility with Trafigura PTE Ltd., a leading commodities group. The company through its Peruvian subsidiary, and Trafigura have agreed upon indicative terms and are in the process of preparing definitive documents for the facility.
Meanwhile, the land use agreement grants Silver Mountain long-term access to key surface areas critical for infrastructure, mining operations, and environmental management. It complements the 20-year agreement previously secured with the Community of Castrovirreyna, meaning that all community-related and regular approvals are now in place to recommence production activities at the mine.
“This milestone clears the path for a full restart of the Reliquias Mine,” said Silver Mountain CEO Alvaro Espinoza. “We are extremely grateful for the support and trust of the Salcca Santa Ana community,” he said. “With both cornerstone community agreements secured, we are ready to move forward with a modern and responsible mining operation that will generate long term value for shareholders – from our investors to local population.”
With the final agreement secured, Silver Mountain said it will commence preparations to begin development and operations at the Reliquias Mine. The company said it will provide updates in due course, outlining the project development schedule and key milestones.
Silver Mountain is a silver explorer and mine development company that completed an IPO that raised $26.4 million in February, 2022. The company has said it wants re-commence production at the Reliquias underground mine and undertake exploration activities at its prospective silver camps at the Castrovirrena Project in Huancavelica, Peru, where it owns a 2,000 tonne-per day processing plant and an operating tailings dam with enough capacity for at least two years of maximum throughput.
In May, 2024, the company released a preliminary economic assessment, which envisages 8.37 million ounces of life-of-mine silver production. The company said production of both bulk and zinc concentrates will begin simultaneously.
Silver Mountain, through its subsidiary Sociedad Minera Reliquias SAC, controls over 27,000 hectares in the Castrovirrena mining district, mostly within the Reliquias and Dorita property blocks. The region is known to host significant metal and polymetallic deposits, including Julcani (101 million ounces of past silver production) and San Genaro (over 60 million ounces of past silver production).
Within the Reliquias concession block, epithermal intermediate-sulphidation-style mineralization was previously mined at the Reliquias and Caudalosa Grande deposits from multiple veins. However, the company said both veins remain highly under explored