TSX-V-listed Apollo Gold has entered into a letter of intent (LoI) with First Majestic Silver, confirming its intention to enter into a three-year earn-in option to acquire the Jalisco group of properties, in Mexico.
The Jalisco assets include six properties and 15 highly prospective claims, 13 of which First Majestic owns 100% of and two in which it has a 45% interest.
The claims cover 5 240 ha in a district that has a history of gold and silver mining, including the historic Etzatlan, Ampora, La Calbaza, Piedra and Bola mines.
Apollo points out that the Jalisco properties are adjacent to a number of properties, such as El Barqueno, El Rayo and Coyote, owned by Canadian miner Agnico Eagle which, together with Compania Minera Artengo, dominate the district.
The LoI is nonbinding, but Apollo says it plans to enter into a definitive agreement within 90 days.
Under the terms of the transaction, Apollo may exercise the option by paying a total of $750 000, as well as issuing shares to First Majestic over a three-year period. In addition, Apollo will commit to exploration expenditure of at least $1.25-million on the Jalisco group of properties within 36 months of closing.