Minco, the precious metals exploration group backed by Dr John Teeling, has acquired a 50 per cent interest in a Mexican gold and silver project for $2.4 million.
Minco has also given a commitment to invest a further $2 million in the exploration and development of the Minera Sisa propertyin the Sierra Madres Mountains, around 170 kilometres from Durango in Mexico. The mining concessions cover an area of around 450 hectares.
According to Minco, a 2002 independent assessment of the property indicated a resource potential of 10 million tonnes at average grades of 480 grammes per tonne of silver and 4.2 grammes per tonne of gold, with copper credits equivalent to more than 12 grammes per tonne gold.
"Only small scale mining has been carried out on the Sisa properties since the 1914 Mexican revolution with no systematic exploration using modern techniques carried out," the chief executive, Mr Matthew Dorman, said. He said initial field studies showed that the area had the potential for a large scale open pit operation in addition to bonanza-grade vein systems.
Minco's stake is being acquired from the Salas family, who will retain a 50 per cent share.
Under the terms of the agreement, Minco will acquire board control and the right to increase its shareholding through additional spending if the family fails to provide further funding on a pro rata basis.
For every $160,000 investment not matched by the other side, Minco's stake will increase by one percentage point.
Minco, which is listed on London's Alternative Investment Market (AIM), already has silver interests in Mexico as well as exploration projects in Ireland and Russia.
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