Regency Silver (RSMX.V) has entered into two separate option agreements to acquire two projects in Mexico.
The first option allows the company to earn full ownership of the El Tablon claims in Mexico’s Durango state. These claims, totaling about 7,200 hectares in size, are located just a handful of kilometers from the San Dimas district where about 11 million ounces of gold and in excess of half a billion ounces f silver have been mined. The El Tablon claims host at least seven veins and breccias and according to the Mexican Geological Service, several higher grade precious and base metals occurrences have been recorded with one sample containing a grade of in excess of 10,000 g/t silver.
In order to acquire full ownership of the El Tablon claims, Regency Silver must pay US$50,000 in cash and issue 1 million common shares. On top of that, it will have to pay taxes and mining filings up to March 31, 2024. There is an additional bonus payment of US$1M in cash in case Regency Silver is able to confirm a total NI43-101 compliant resource of at least 1 million gold-equivalent ounces of 70 million silver-equivalent ounces.
The second option agreement allows the company to acquire full ownership inn the Oso Blanco claims in Sonora. This land package covers an area of in excess of 5,500 hectares and is strategically located continuous to the flagship Dios Padre project where Regency Silver has just completed a drill program.
In order to earn full ownership, Regency Silver has to make cash payments totaling US$0.5M over a five year period as well as making tax and mining filings payments by March 31, 2023. These back taxes are currently estimated at US$0.5M as well. And just like the El Tablon option agreement, Regency Silver has committed to paying a US$1M bonus if the company confirms the presence of at least 1 million gold-equivalent ounces or 70 million silver-equivalent ounces.
Disclosure: The author has a long position in Regency Silver. Please read our disclaimer.