Kootenay Silver (
TSX: V.KTN,
Forum) advanced its efforts at its Promontorio Mineral Belt silver properties located in Sonora, Mexico, when the company announced today Pan American’s wholly owned subsidiary, Compania Minera Dolores S.A. de C.V. (“Dolores”) entered into a series of agreements with Kootenay’s 100%-owned subsidiary, Minera JM, S.A. de C.V. (“Minera”).
According to the
news release, the agreements included an option agreement where Dolores was granted an option to earn a 75% interest in the company’s Promontorio Mineral Belt silver properties, including the Promontorio and La Negra deposits. Dolores has promised to make a cash payments totaling US$8.05 million over a 4-year earn-in period following the execution of the agreement as well as committing to US$8.0 million of exploration and development expenditures on the aforementioned properties during the option period.
Pursuant to this option agreement, Pan American will also invest CDN$2.0 million in Kootenay by subscribing for 9.09 million shares at CDN$0.22 per share.
When the agreement closes, both parties expect to enter into a property purchase option agreement where Dolores will provide Minera with the option to acquire up to two of its exploration properties in Mexico in return for a 2.5% net smelter return royalty on each of the acquired properties and together with the Option and Investment.
Kootenay Silver President and CEO, James McDonald, commented on the deal, “Kootenay has done an excellent job exploring their large land package in the Promontorio Mineral belt, located just 190 km NW of our Alamo Dorado mine.”
He continued, “La Negra is an exciting, high grade, potentially open pitable deposit, and Promontorio is a large, lower grade silver resource, which will likely require higher metal prices or better grades to move forward. Kootenay has already defined mineral resources at Promontorio and both deposits retain excellent exploration potential.”
Then he concluded, “This is an ideal entry point for Pan American into a highly prospective mineral belt located in a preferred jurisdiction, which will allow us to add value by utilizing our proven expertise in exploration and project development.”
Kootenay Silver was in the news recently when
the Vancouver-based company announced signing a definitive agreement with Northair Silver a little more than a week ago.
Shares edged up 2.13% on the news to $0.24 per share.
Currently there are 79.4m outstanding shares with a market cap of $19.1 million.
FULL DISCLOSURE: Kootenay Silver is a Stockhouse Publishing client.