AIM listed exploration company Minco is to acquire a 50 per cent stake in a Mexican company that owns a number of gold and silver mines.
Minera Sisa SA de CV owns a number of mining properties in the Sierra Madre Mountains, 170 kilometres from Durango in Mexico.
"We have been evaluating a number of possible acquisitions in Mexico to add to our portfolio of precious metal projects but the potential to develop a major ore body at the Minera Sisa properties is well ahead of anything else we have seen," said Mr Matthew Dorman, CEO of Minco.
"Our initial field studies already show that the area has excellent potential to host a large scale open pit operation in addition to the bonanza grade vein systems."
Minco paid $2.4 million for the shares and is to invest another $2.0 million into the exploration and development of the mines. Minco will gain immediate control of the board of Sisa.
Sisa's mining concessions cover an area of 450 hectares and are within the famous Sierra Madre Gold and Silver Belt of central Mexico.
An independent assessment of the property carried out in 2002 indicated a resource potential of 10 million tonnes at average grades of 480 grammes per ton of silver and 4.2 grammes per ton gold - and with copper credits equivalent to over 12 grammes per tonne gold.