Magna Gold to acquire Mercedes property in Mexico
MAGNA GOLD Corp. has entered into an arm’s-length option agreement dated Sept. 25, 2018, with Beatriz Fong, an individual resident in Sonora state, Mexico. Pursuant to the agreement, the corporation will acquire from the seller an option (“option”) to acquire a 100 per cent undivided interest (the “proposed transaction”) in two mining claims (the “Mercedes property”) located in the municipality of Yecora, Sonora, Mexico, for a four-year period. The property consists of two contiguous claims covering an aggregate area of approximately 345 hectares is located approximately 250 kilometers east-southeast along the Federal Highway 16 from the state capital, Hermosillo. In consideration of the grant of the option, Magna Gold will: (i) pay to the Seller an aggregate of US$1,340,000 plus VAT of 16 per cent, paid in installments commencing on the 6th month from the effective date and ending on the 48th month from the effective date; (ii) issue to the Seller a 3 per cent net smelter returns (“NSR”), capped at US$3,500,000 and subject to the right of the corporation to acquire all 3 percentage points of the NSR at a price of $500,000 per percentage point, within the first three (3) years of commercial production of the Mercedes property; and (iii) conditional on the completion of a going public transaction within six months of the effective date, issue 2,442,105 common shares (“common shares”) of the corporation to the Seller. On the effective date, the Discounted Market Price of the common shares was $0.30 per common share.
The proposed transaction will constitute the corporation’s qualifying transaction. Following completion of the proposed transaction, it is anticipated that the corporation will be listed on the Exchange as a Tier 2 mining issuer.
Mercedes is an exploration property located within the Sierra Madre Occidental province, a historically productive, regionally extensive Tertiary volcanic field which stretches from the United States/Mexico border to Central Mexico. Previous work at the La Lamosa area, one of the mineralized targets within the mining concessions, reports disseminated gold mineralization hosted within an andesitic and rhyodacitic volcanic complex intruded by a quartz-feldspar porphyry (QFP). Gold and silver are target commodities sought at Mercedes and the property exhibits textures and alteration consistent with high sulphidation epithermal mineralization, typical of important discoveries in the region.
A mineral exploration program is being designed to both evaluate the property and determine the grade and extent of La Lamosa area. The program will consist of diamond drilling, property wide geological mapping and prospecting including collection of chip samples and soil sampling. The exploration will be designed to evaluate La Lamosa and identify additional analogous zones. Management of the Resulting Issuer
Upon completion of the proposed transaction, it is currently anticipated that the board of directors of the corporation will consist of three individuals who are currently directors of the Corporaiton: Arturo Bonillas Zepeda, Laura Cristina Diaz Nieves, and Alexan der Ts ak u mis. Miguel Angel Soto y Bedolla has been appointed as the Vice President of Exploration of the corporation. Other than the foregoing officer and proposed directors, it is anticipated that there will be no additional insiders of the corporation upon completion of the proposed transaction. Prior to completion of the qualifying transaction, management intends to appoint a new individual to act as Chief Financial Officer of the corporation.
Erika Flores condensed this news release (email@example.com).
Francisco Arturo Bonillas Zepeda, Laura Cristina Diaz Nieves, Alexander Peter Tsakumis
(MGR) Shares: 27,075,000