Silverton Metals Corp. [SVTN-TSXV; SVTNF-OTC] has entered into a share purchase agreement with Zapata Exploration Ltd. and 0924682 B.C. Ltd. to acquire the Margaritas gold-silver property by acquiring all of the issued and outstanding shares of Zapata’s Mexican subsidiary, Impulsora De Proyectos Mineros SA de CV. The Margaritas gold property consists of two concessions totalling 500 hectares located in the state of Durango, Mexico.
Highlights of Margaritas gold property include an underexplored, high-grade epithermal gold-silver deposit hosted in productive volcanic rocks of the Sierra Madre Occidental. Gold grades include 73.7 g/t in dump samples and 31.6 g/t in rock chip channel samples with silver grades between 1 to 38 g/t gold. The vein is exposed for 3.5 km along strike and 240 metres along the vertical. Artisanal production exists but the vein has never been drilled.
John Theobald, President and CEO, commented, â€œWe are very excited about the Margaritas acquisition as it contains a high-grade gold vein open in all directions with visible gold and the potential to be a bonanza-grade deposit. Both the environmental permit application and community agreement process have already commenced, which have given the company a head start on the exploration of the project. Favourable topography facilitates drilling and or tunnelling and eventually would also facilitate underground mining. The simple mineralogy suggests that the gold could be easily extracted by gravity and leaching methods. We plan to rehabilitate roads, refine mapping and sampling, and get the project ready for drilling before the end of the year.â€
The Margaritas Gold Property consists of two concessions, Margaritas and Ampliacion las Margaritas, that cover a total of 500 hectares located in the southwestern corner of Durango state.
Channel rock chip sampling by the previous operator report gold grades between 0.01 and 31.6 g/t and between 0.7 and 73.7 g/t in dump samples. Silver grades vary between detection limit (<0.2 g/t) and 38 g/t in both dump and rock-chip channel samples. Visible gold has been found in pits, trenches and dumps located along the central part of the vein.
To acquire all the issued and outstanding shares of Impulsora, the company agreed to issue 750,0000 common shares and grant a net smelter return royalty of 0.5%, which may be repurchased at a price of US $250,000. Zapata and 0924682 are a private company controlled by Chris Osterman and Raul Diaz-Unzueta.
Impulsora originally acquired its interest in the Margaritas property under the terms of transfer of mining concessions and assignment of rights agreement, as amended. Under the terms of the underlying agreement, the Margaritas property is subject to a 1% Net Smelter Return Royalty, which may be repurchased for US $320,000 (of which US$120,000 has been paid). The remaining US$200,000 must be paid as follows: US$100,000 plus VAT on April 25, 2023 and US $100,000 plus VAT on April 25, 2024. If Impulsora does not commence commercial production or repurchase the royalty by April 25, 2024, the original owner may repurchase the Margaritas Property for $1. Closing of the acquisition is subject to satisfying customary conditions and TSX Venture Exchange approval.
Silverton Metals holds a 100% interest in three significant silver assets in Mexico – Pluton, in Durango, Penasco Quemado in Sonora and La Frazada in Nayarit.