Magellan Gold: Purchase of Mexican Flotation Plant to Close in October
RENO, Nevada, August 30, 2017 /PRNewswire/ --
Magellan Gold Corporation (OTCQB: MAGE) ("Magellan" or "the Company") is pleased to announce its purchase of the SDA Mill, Nayarit State, Mexico, from Rose Petroleum plc (AIM: ROSE) is anticipated to be concluded in October 2017. Total consideration for the purchase is US$1.5 million, consisting of $1.0 million in cash and $500,000 in Magellan stock, of which $100,000 in cash already has been paid.
"Magellan and Rose are making rapid progress towards completion of the remaining closing items," said CEO Pierce Carson. "These items include execution of the the definitive agreement, Rose's shareholder approval, and restructuring of Mexican ownership of the mill."
As announced August 16, 2017, Magellan arranged $900,000 in irrevocable bridge loans in support of its option to purchase the SDA Mill. The bridge loans are sufficient to complete the cash component of the purchase price. Magellan also is obligated to reimburse Rose for mill employee and maintenance costs of approximately $25,000 per month for August and September 2017. The August payment was made, and the September payment will be made on September 1, 2017.
The Company's strategy following closing will be to resume processing operations, build production and increase cash flow. A key objective will be to secure high-grade feed sources. The mill lies within the rich Sierra Madre Occidental mineralized belt, which historically has yielded millions of ounces of precious metals and offers multiple high-grade gold and silver epithermal vein opportunities.
Although the parties are targeting closing to occur in October 2017, there can be no assurance that the purchase of the mill will be completed.
The SDA Mill is a fully operational flotation plant that also includes a precious metals leach circuit and associated assets, licenses and agreements. The mill has the capacity to process ore at a rate of up to 200 tons per day. The mill has a ten-year operating history. Historically its operation has been based on sales of flotation concentrates to smelters, and payment for precious metals content. Milling activity currently is on hold pending the completion of the purchase transaction.
About Magellan Gold Corporation
Magellan Gold Corp. (OTCQB: MAGE) is a US public enterprise focused on the exploration and development of precious metals. The Company has obtained an option to acquire the SDA flotation plant in the State of Nayarit, Mexico, and controls two precious metals exploration properties located in Arizona and in Peru.
The 100% owned Silver District Property in southwest Arizona comprises over 2,000 acres covering the heart of the historic Silver District. The property contains a near-surface historical drilled resource of 16 million ounces of silver and exhibits exploration promise for significant expansion. The Niñobamba Silver-Gold Property in central Peru, on which the Company has the right to earn a 50% interest, covers 9,027 acres and demonstrates potential for a large, bulk tonnage, silver-gold deposit.
To learn more about Magellan Gold Corporation, visit http://www.magellangoldcorp.com.
Cautionary Statement
The United States Securities and Exchange Commission permits mining companies, in their filings with the SEC, to disclose only those mineral deposits that a company can legally extract or produce. Under SEC Industry Guide 7 standards, a "final" or "bankable" feasibility study is required to report reserves. Currently we have not delineated "reserves" on any of our properties. We cannot be certain that any deposits at our properties will ever be confirmed or converted into SEC Industry Guide 7 compliant "reserves." Investors are cautioned not to assume that all or any part of any "resource" estimates will ever be confirmed or converted into reserves or that they can be economically or legally extracted.
Forward Looking Statements
This release contains "forward-looking statements." Such statements are based on good faith assumptions that Magellan Gold Corp. believes are reasonable but which are subject to a wide range of uncertainties and business risks that could cause actual results to differ materially from future results expressed, projected or implied by such forward-looking statements. Factors that could cause actual results to differ from those anticipated are discussed in Magellan Gold Corporation's periodic filings with the Securities and Exchange Commission.
Contacts:
Magellan Gold Corp.
Pierce Carson: (505) 463-9223
John Power: (707) 884-3766
Peter Nesveda (INT IR): +61 4 1235 7375
SOURCE Magellan Gold Corp.