Wednesday, 26th July 2006 (2711 views)

Lategra Gold has entered into an acquisition agreement with Tara Gold Resources to acquire up to a 70 per cent interest in the Picacho Gold Mine in the Northern Sierra Madre Gold Belt in the Republic of Mexico.

The Picacho mine, which lies 24 kilometres by haulage road from the town of Bacoachi, is comprised of 3,236 hectares of mining concession encompassing several areas of hydrothermal alteration.

The previous owners have been exploiting an up to six-metre wide vein structure for the past three years, finding average ore grades of five grams gold and 15 grams silver per tonne.

The purchase of the mine includes an extensive processing facility currently capable of 250 tonnes per day of ore throughput.

Under the terms of the option agreement Lateegra will make staged escalating payments to the vendors totalling $7.3 million over a five-year period, plus an additional $100,000 per year on the anniversary of the agreement.

The company will also commit to spending $1 million in exploration and $2 million on mine development and production plant enhancements within 18 months of the signing of the agreement.

Once Lateegra has earned the 65 per cent interest, a joint venture will be formed and a standard dilution clause will be in effect.

 

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