Latin Metals transfers Organullo gold project to Aumin Argentina for up to US$ 40 million – BNamericas

News

Latin Metals agreed to transfer 100% of its Organullo gold project in the province of Salta to Aumin Argentina, through staggered cash payments of up to US$40 million (mn), including the option to retain production royalties.

The agreement builds on Aumin’s track record in developing mining projects, including maximizing the potential of the Argentine silver-gold initiative Diablillos by AbraSilver, currently one of the country’s most important advanced-stage precious metals assets. 

Commitments

In addition to various payments for the acquisition, the commitment includes carrying out drilling campaigns of up to 40,000 mt over six years, with a minimum of 3,000 mt by the first anniversary and 15,000 mt by the third. 

The Canadian company Latin Metals will be able to choose between keeping a 19.9% equity stake — with representation rights on the board — or receiving a 2% net smelter return (NSR) royalty. There is also an option to buy back up to 1% of the royalties for US$20mn within a three-year period. 

The president of Aumin, Hernán Zaballa, described Organullo as “a great gold system” with a solid technical basis and a lot of potential in exploratory terms throughout the entire property. 

For his part, Keith Henderson, CEO of Latin Metals, valued the decision to leave Organullo in Aumin’s hands, due to its extensive experience in geological research and knowledge of mining legislation, transaction structuring, and socio-environmental and operational management. 

The project

Organullo has a valid drilling permit and studies that identify a prospective environment for high-sulfidation epithermal mineralization and porphyry-type systems. 

Latin Metals cites the Salares Norte gold deposit in Chile as a technical analogue, whose proven and probable reserves amount to 3,4Moz with a grade of 5,36 g/t of gold, although it clarifies that this does not imply estimates of future production or costs.

However, the company states that Organullo does represent an opportunity to obtain advantageous future commercial conditions.

Aside from Organullo, Latin Metals is advancing other gold and copper exploration projects in Argentina, such as: Cerro-Bayo, Mirador, Terraza, Trigal, Crosby, Ana María, Solario and Ventana.