Cerrado Gold Inc. (TSX.V: CERT, OTCQX: CRDOF) announced a binding agreement to acquire the Falcon Properties in Santa Cruz Province, Argentina, adjacent to its Minera Don Nicolas (MDN) Calandrias heap leach operations. The acquisition from a subsidiary of Pan American Silver Corp. (YASSA) positions the company to extend mine life and potentially increase production levels.
Acquisition Highlights
The Falcon Properties cover approximately 20,026 hectares adjacent to MDN's gold mine property, near the Calandrias heap leach operations. An internal target for initial exploration indicates potential for 150–200 koz Au with grades ranging from 0.8 to 1.1 g/t Au. However, this is conceptual in nature, with insufficient exploration to define a mineral resource, and further exploration may not result in a delineated resource.
Historical Drill Intercepts
- Drill Hole FD001: 30 metres grading 1.42 g/t AuEq
- Drill Hole FD004: 48 metres grading 1.67 g/t AuEq
- Drill Hole FD0010: 52 metres grading 1.34 g/t AuEq
A 5,000-metre drill program will commence immediately for resource definition and to test significant exploration potential over the next three months.
Transaction Details
MDN will pay a purchase price of $0.2 million in cash and grant a 2% net smelter returns royalty to the vendor (PAS Royalty). Certain properties are also subject to a 2% net smelter royalty to Cerro Vanguardia S.A. (CVSA), for which consent has been obtained. No finder's fees were paid.
The site is accessible via MDN's Calandrias entrance road and features northeast-trending hills with visible ground oxidation, indicating a hydrothermal alteration zone.
Strategic Rationale
Mark Brennan, CEO & Chairman, commented: "We are extremely pleased with the acquisition of the highly prospective Falcon Properties. The Falcon Properties host additional mineralization in close proximity to our existing operations. Beyond Falcon, we see the opportunity to leverage our installed infrastructure to drive regional consolidation, enhance and extend the potential mine life at Calandrias, and support long-term mineral growth for MDN."
This acquisition is the first in a regional consolidation strategy aimed at materially expanding resources around the Calandrias Production Hub. The MDN strategy is to initially extend mine life and then increase production levels.
