Magna Gold to ac­quire Mer­cedes prop­erty in Mex­ico

Stockwatch Daily - - SHELLS - Mr. Fran­cisco Zepeda re­ports

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 prop­erty

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 (erikaf@stock­watch.com).

Fran­cisco Ar­turo Bonil­las Zepeda, Laura Cristina Diaz Nieves, Alexan­der Peter Tsaku­mis

(MGR) Shares: 27,075,000

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