TORONTO, Nov. 10, 2020 /CNW/ - Magna Gold Corp.
(TSXV: MGR) (OTCQB: MGLQF) ("Magna" or the "Company")
is pleased to announce that the Company and Molimentales del
Noroeste, S.A. de C.V. (the "Purchaser"), a subsidiary of
the Company, have entered into a definitive option acquisition
agreement (the "Agreement") with Sable Resources Ltd.
("Sable") and Exploraciones Sable, S. de R.L. de C.V. (the
"Vendor"), a wholly-owned subsidiary of Sable, to acquire
(the "Acquisition") the Vendor's option (the
"Option") to acquire a 100% undivided interest in the mining
concessions comprising the Margarita Silver Project (the
"Property"). The Property is comprised of two mining
concessions, covering 125.625 hectares, located within the prolific
Sierra Madre Gold Belt, which hosts
numerous multimillion-ounce gold-silver deposits, 88 kilometers
south of the state capital of Chihuahua in the Municipality of
Satevo, State of Chihuahua,
Mexico. The Property lies 15 kilometres northwest on strike with
Sunshine Silver Corp.'s Los Gatos Mine.
Summary of the Acquisition
Pursuant to the terms of the Agreement, the Purchaser will
acquire the Option in exchange for: (i) CAD$1,500,000 in cash, plus an additional
CAD$800,000 in cash representing
Mexican VAT; and (ii) CAD$3,500,000
in common shares in the capital of Magna ("Magna Shares"),
being 3,219,278 Magna Shares at a deemed price of $1.0872 per Magna
Share (the "Issue Price"), representing the volume
weighted average price of the Magna Shares on the TSX Venture
Exchange (the "Exchange") for the fifteen trading days prior
to the date of the Agreement. Immediately following the
Acquisition, the Purchaser will exercise the Option to acquire the
Property (the "Option Exercise") by payment to the
titleholders of the Property of: (i) CAD$500,000 in cash, plus an additional
$368,000 in cash representing Mexican
VAT; and (ii) CAD$1,800,000 in Magna
Shares, being 1,655,629 Magna Shares at the Issue Price.
Closing of the Acquisition and the Option Exercise is expected
to occur on or about November 16,
2020 and is subject to a number of conditions customary for
a transaction of this nature, including the receipt of all required
regulatory approvals, including the acceptance of the Exchange.
The securities issued in connection with the Acquisition and the
Option Exercise will be subject to a four-month hold period from
the date of issuance in accordance with applicable Canadian
securities laws.
The Property
The Property hosts five quartz-barite and minor calcite
epithermal veins-breccias of low to intermediate sulphidation
affinity hosted by volcanic rocks of andesitic and rhyolitic
composition.
The Margarita Vein is the main structure and can be traced on
surface for at least 1.6 kilometres of longitude with a bearing of
N50°-80°W dipping to the southwest 65° to sub-vertical. Samples
collected at surface on this structure returned several values over
100 g/t Ag and up to 909 g/t Ag. El Caido Vein is a secondary
braided vein system consisting of four individual quartz-barite
structures that crop out for at least 800 metres of longitude. Its
strike is parallel to the Margarita Vein, dipping from 60° to
sub-vertical to the southwest. Samples collected on this vein
system returned values of up to 174 g/t Ag. The Juliana Vein is
located in the footwall of the Margarita Vein and can be traced on
surface for at least 650 metres long striking N40°W with steep dips
to the northeast. Samples collected on this structure returned
values of up to 405 g/t Ag. The Fabiana Vein is a parallel
structure located in the hanging wall of the Juliana Vein and only
15-20 metres apart. The Marie Vein, which crops out at the
easternmost part of the property, can be traced for at least 400
metres. It strikes N20-30W with steep dips to the southwest and
northeast. Samples collected on this structure returned values of
up to 1,235 g/t Ag. All the veins in the property returned
high-grade silver values along with strongly anomalous lead, zinc,
arsenic, antimony and barium, indicating the robustness of the
Margarita Epithermal Veins System.
Sable conducted two core drill campaigns during 2018-2019 of
5,245.40 metres in 35 holes. Highlights include:
- 462 g/t AgEq (430 g/t Ag, 0.18% Pb, and 0.66% Zn) over
4.25m from 41.5m to 45.75m in
hole M-DDH-18-04, including 1,073 g/t AgEq (986 g/t Ag, 0.5%
Pb, and 1.6% Zn) over 1.5m from
42.7m to 44.20m
- 514 g/t AgEq (446 g/t Ag, 0.7% Pb, and 1.04% Zn) over
12.4m from 40.95m to 53.35m in
hole M-DDH-18-06, including 902 g/t AgEq (745 g/t Ag, 1.38%
Pb, and 1.87% Zn) over 4.1m from
42.7m to 46.8m.
- 461 g/t AgEq (306 g/t Ag, 0.73% Pb, and 1.88% Zn) over
14.05m in hole M-DDH-18-08
from 67.4m to 81.45m, including 859 g/t AgEq (557 g/t Ag, 2.21%
Pb, and 0.44% Zn) over 2m from
73.2m to 75.2m.
- 252 g/t AgEq (229 g/t Ag, 0.97% Pb, and 0.32% Zn) over
11.3m in hole M-DDH-18-11 from
57.35m to 68.65m, including 889 g/t AgEq (844 g/t Ag, 0.25%
Pb, and 0.6% Zn) over 1.3m from
62.75m to 64.05m.
- 298 g/t AgEq (283 g/t Ag, 0.32% Pb, and 0.78% Zn) over
33.3m from 18.75m to 52.05m in
hole M-DDH-19-14, including 702 g/t AgEq (579 g/t Ag, 0.76%
Pb, and 1.67% Zn) over 9.9m from
33.55m to 43.45m.
- 102 g/t AgEq (83 g/t Ag, 0.08% Pb, and 0.29% Zn) over
20.6m in hole M-DDH-19-20 from
47.25m to 67.85m, including 252 g/t AgEq (222 g/t Ag, 0.13%
Pb, and 0.47% Zn) over 5.1m from
50.3m to 55.4m
- 130 g/t AgEq (102 g/t Ag, 0.1% Pb, and 0.43% Zn) over
48.65m in hole M-DDH-19-21
from 48.95m to 97.6m, including 222 g/t AgEq (198 g/t Ag, 0.18%
Pb, and 0.3% Zn) over 1m from
64.65m to 65.45m, 428 g/t AgEq (376 g/t Ag, 0.28% Pb, and
0.75% Zn) over 2.85m from
83.30m to 86.15m, and 351 g/t AgEq (156 g/t Ag, 0.72% Pb,
and 3.09% Zn) over 2.6m from
89.8m to 92.4m.
- 73 g/t AgEq (63 g/t Ag, 0.05% Pb, and 0.14% Zn) over
12.5m in hole M-DDH-19-22 from
39.75m to 52.25m, including 143 g/t AgEq (126 g/t Ag, 0.1%
Pb, and 0.24% Zn) over 4.8m from
40.95m to 45.75m, and 176 g/t AgEq (97 g/t Ag, 0.36% Pb,
and 1.19% Zn) over 12.8m from
68.6m to 81.4m, including 529 g/t AgEq (213 g/t Ag, 1.81%
Pb, and 4.52% Zn) over 1.9m from
75.20m to 77.10m.
- 177 g/t AgEq (117 g/t Ag, 0.17 g/t Au, 0.21% Pb, and 0.7% Zn)
over 37.35m in hole
M-DDH-19-24 from 74.70m to
112.05m, including 391 g/t AgEq (353
g/t Ag, 0.12% Pb, and 0.56% Zn) over 0.9m from 94.30m to
95.20m, and 689 g/t AgEq (400 g/t Ag,
1.07 g/t Au, 1.09% Pb, and 3.0% Zn) over 5.5m from 102.70m
to 108.25m, including 1,122 g/t AgEq
(790 g/t Ag, 2.92 g/t Au, 2.04% Pb, and 0.37% Zn) over 1.65m from 102.70m
to 104.35m.
In addition, Sable also identified during the core drilling
campaigns, a lower grade halo in numerous holes with encouraging
silver varying from 14 metres to 60 metres wide with grades varying
between 50 g/t Ag to 90 g/t Ag.
Sable ran a preliminary carbon-in-leach test and obtained
metallurgical recoveries above 85% for silver, showing that
mineralized material is not refractory.
"Margarita displays an outcropping high grade core zone 2 metres
to 14 metres in width, and 14 metres to 60 metres lower grade halo
that continues at least to 100 metres of depth, at elevations of
2,000-2,100 m.a.s.l., with clear
upside potential down dip the structure as evidenced by the high
grade sulphide rich mineralization as at the nearby Los Gatos Mine,
where the top of the mineralized zone is at an elevation of
1,500 m.a.s.l. Further upside
potential exists in undrilled gaps along the upper levels of
Margarita, and in the other four known veins. Acquiring the
Property gives the Company exposure to a potential high-grade
silver project and additional optionality to rising silver prices"
commented Arturo Bonillas, President
and Chief Executive Officer of the Company.
Qualified Person
James Baughman (P. Geo.),
Consulting Geologist and a Qualified Person as defined by National
Instrument 43-101 – Standards of Disclosure for Mineral
Projects, has reviewed and approved the scientific and
technical information in this news release.
About Magna Gold Corp.
Magna Gold Corp. is a Canadian gold company engaged in
operations, development, exploration and acquisitions in
Mexico. Its primary asset is the
producing San Francisco gold mine
in Sonora, Mexico and exploration
stage projects include San Judas,
La Pima and Mercedes.
The Company's shares trade on the TSXV under the trading symbol
"MGR" and OTCQB under the trading symbol "MGLQF". Magna is well
integrated into its nearby communities, employs local residents,
and uses local services when possible.
This news release includes certain "forward-looking statements"
which are not comprised of historical facts. Forward-looking
statements include estimates and statements that describe the
Company's future plans, objectives or goals, including words to the
effect that the Company or management expects a stated condition or
result to occur. Forward-looking statements may be identified by
such terms as "believes", "anticipates", "expects", "estimates",
"may", "could", "would", "will" or "plan". Since forward-looking
statements are based on assumptions and address future events and
conditions, by their very nature they involve inherent risks and
uncertainties. Although these statements are based on information
currently available to the Company, the Company provides no
assurance that actual results will meet management's expectations.
Risks, uncertainties and other factors involved with
forward-looking information could cause actual events, results,
performance, prospects and opportunities to differ materially from
those expressed or implied by such forward-looking information.
Forward looking information in this news release includes, but is
not limited to, information about the structure and terms of the
Acquisition, timing for completion of the Acquisition, the
structure and terms of the Option Exercise, timing for completion
of the Option Exercise, timing for receipt of required regulatory
approvals, including the acceptance of the Exchange, the ability of
the Company to complete the Acquisition and the Option Exercise on
the terms announced, the Company's objectives, goals or future
plans, exploration results, potential mineralization, the
estimation of mineral reserves and resources, exploration and mine
development plans, timing of the commencement of operations and
estimates of market conditions. Factors that could cause actual
results to differ materially from such forward-looking information
include, but are not limited to, the inability to satisfy the
conditions required to complete the Acquisition and the Option
Exercise, the inability to receive required regulatory approvals,
including the acceptance of the Exchange, termination of the
Agreement, failure to identify mineral resources, failure to
convert estimated mineral resources to reserves, the inability to
complete a feasibility study which recommends a production
decision, the preliminary nature of metallurgical test results,
delays in obtaining or failures to obtain required governmental,
environmental or other project approvals, political risks,
inability to fulfill the duty to accommodate First Nations and
other indigenous peoples, uncertainties relating to the
availability and costs of financing needed in the future, changes
in equity markets, inflation, changes in exchange rates,
fluctuations in commodity prices, delays in the development of
projects, capital and operating costs varying significantly from
estimates and the other risks involved in the mineral exploration
and development industry, and those risks set out in the Company's
public documents filed on SEDAR. Although the Company believes that
the assumptions and factors used in preparing the forward-looking
information in this news release are reasonable, undue reliance
should not be placed on such information, which only applies as of
the date of this news release, and no assurance can be given that
such events will occur in the disclosed time frames or at all. The
Company disclaims any intention or obligation to update or revise
any forward-looking information, whether as a result of new
information, future events or otherwise, other than as required by
law.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
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SOURCE Magna Gold Corp.