Austral Gold picks-up stake in ASX-listed explorer after sale of non-core Argentine silver project
Toronto-listed Austral Gold (TSX-V: AGLD) is topping up its cash, snaring a strategic stake in budding silver play E2 Metals (ASX: E2M), and is now free to focus on its core projects.
Austral (ASX: AGD), which is also listed in Australia, will pocket US$5 million and take a 19.99% holding in E2 Metals by selling its Pinguino silver-gold project in Argentina.
The sale is via a three-stage earn-in that will see E2 Metals control 100% of the project, which is located in Santa Cruz, and described as one of the largest undeveloped silver deposits in that province.
Pinguino has a foreign resource of a contained 53 million ounces of silver and 351,000oz of gold in indicated and inferred categories.
The divestment leaves Austral to concentrate on its core mining operations in Chile and Argentina, as well as interests in Utah and Nevada.
Austral’s flagship asset is the historic Guanaco/Amancaya gold-silver mine complex in Chile, where the company is looking to extend the silver-gold-copper resource. Its other key project is the Casposo-Manantiales gold mine complex in Argentina, which is currently on care and maintenance.
It also has an interest in the gold-silver Rawhide mine in Nevada and the Mercur gold project in Utah.
Updated mineral resource will follow completion of deal
To-date E2 Metals has focused on its flagship Conserrat gold-silver project, which is located 15m from Pinguino.
E2 Metals chairman Peter Mullens said the agreement with Austral is a transformational move for his company.
It consolidates two large silver and gold vein districts in one company, forming an emerging pure play silver company on the ASX.
“Shortly after closing the transaction, E2 Metals intends to publish an updated mineral resource estimate for Pinguino … and define plans for resource expansion and vein discoveries,” he added.
Vein strike over 115km long
Pinguino comprises four mining titles covering 9,986 hectares and lies 35km northwest of the Cerro Vanguardia mine operated by AngloGold Ashanti (ASX: AGG).
Silver and gold were first discovered at Pinguino in the mid-1990s by a subsidiary of Anglo American.
E2 Metals said its new project is host to the second largest vein in Santa Cruz (behind Cerro Vanguardia), where mineralised vein outcrops are up to 13m wide and cover a combined strike of 115km.