TORONTO, Nov. 19, 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 closed the acquisition (the "Acquisition") of the
option (the "Option") to acquire a 100% undivided interest
in the mining concessions comprising the Margarita Silver Project
(the "Property") pursuant to 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. Immediately
following the Acquisition, the Purchaser exercised the Option to
acquire the Property (the "Option Exercise"). 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.
Pursuant to the terms of the Agreement, the Purchaser acquired
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 for the fifteen trading days prior to the date of the
Agreement. Immediately following the Acquisition, the Purchaser
exercised the Option to acquire the Property by payment to the
titleholders of the Property (the "Titleholders") 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.
The Magna Shares issued in connection with the Acquisition and
the Option Exercise are subject to a four-month hold period in
accordance with applicable Canadian securities laws which will
expire on March 18, 2021.
Concurrent with the Option Exercise, in accordance with the
terms of an amended and restated royalty purchase agreement dated
October 13, 2020 between Osisko Gold
Royalties Ltd ("Osisko"), Sable, the Vendor and certain
affiliates of Sable and the Vendor, the Company and the Purchaser
have entered into a royalty agreement with Osisko, pursuant to
which the Purchaser will pay Osisko a 2% net smelter returns
royalty on all products mined and produced from the Property.
For more information about the Property, please refer to the
Company's news release dated November 10,
2020.
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, 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, 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.