TORONTO (miningweekly.com) – TSX-V-listed explorer First Mexican Gold has inked a definitive accord with private United Arab Emirates firm Link Natural Resources (LNR) to form a 50/50 joint venture (JV) that would advance the Guadalupe precious metals project, with First Mexican designated as the operator.
LNR would acquire a 50% working interest in exchange for a scheduled investment of $8-million within the first year.
Dubai-based Link would have to pay $5-million to fund permitting and advance work on the project’s Karen zone, as well as $1-million towards parallel resource definition at the Diana zone gold and silver discovery, and testing at depth on both the Linda and Erica zones. Cost recovery payments of $2-million would also need to be made to First Mexican.
“This deal underscores the importance and relief that private equity is bringing to good projects in the junior sector as with the individual investors who have supported us to this point. Creation of shareholder value is a priority and First Mexican is now much better capitalised than many other junior companies. Personally, I look forward to being extremely busy advancing the Karen zone over the next year and plan to dedicate considerable time on site [to advancing] our understanding of the potential based on the numerous drill results received to date," First Mexican president and CEO Jim Voisin explained.
First Mexican's Guadalupe property was in the same geographic region of Mexico as numerous producing mines in the Sierra Madre Occidental, including the Mulatos mine of Alamos Gold, the Dolores mine of Pan American Silver and the Ocampo mine of Minera Frisco. The property was also next to Corex Gold's Santana property, currently undergoing production feasibility in partnership with H Morgan & Company and Chester Millar as lead adviser.