Silver Bull Resources has signed an agreement with a wholly owned subsidiary of South32, granting an option to the latter to form a 70/30 joint venture with respect to the Sierra Mojada project in Mexico.
Image: Zinc acetate crystallized by slow evaporation. Photo courtesy of Chemicalinterest (talk)/Wikipedia.
Under the terms of the agreement, South32 will have an option to buy to subscribe for 70% of the shares of Silver Bull’s Mexican subsidiary Minera Metalin for $100m.
The transaction amount will be utilized to fund expenditure on exploration and development costs of the project.
Silver Bull CEO and director Tim Barry, President said: “This validates the significant success we have had in identifying high grade sulphide zones at the Sierra Mojada project.
“South32 is a globally diversified metals and mining company that will bring funding and significant technical expertise to the project. We believe this agreement recognizes the significant potential at the Sierra Mojada project.”
Located 250km north of the city of Torreon in Coahuila State, Mexico, the Sierra Mojada project lies within a historical high grade silver, lead, zinc mining district discovered in 1879.
The project, which is highly prospective for silver and zinc, is 100% owned and operated by Silver Bull.
The Sierra Mojada project is part of a large land package comprising 20 mining concessions totalling 4,715 hectares.
During the four year option period, South32 will also contribute a minimum of $10m annually to fund exploration at the Sierra Mojada project.
Under the first year’s exploration program, which is planned to begin as soon as possible, a regional airborne electromagnetic survey a targeted drilling program will be carried out on the project.
Silver Bull said: “Initial targets will include extensions of the sulphide zones recently identified by Silver Bull and the Palomas Negros area. The exploration program will be initially managed by Silver Bull.”