Apollo Silver Corp. (“
Apollo
Silver” or the “
Company”) (TSX.V:APGO,
OTCQB:APGOF, Frankfurt:6ZF0) has entered into an exploration,
earn-in and option agreement (the “
Option
Agreement”), dated effective September 20, 2024, with MAG
Silver Corp. (“
MAG”) (TSX:MAG) and its subsidiary,
Minera Pozo Seco, S.A. de C.V. (“
MPS”), pursuant
to which Apollo Silver has the option (the
“
Transaction”) to acquire the Cinco de Mayo
Project (the “
Project” or “
Cinco de
Mayo”).
“This is an exciting time for Apollo Silver as
the addition of Cinco de Mayo marks the beginning of our
transformation as a Company. We have successfully mitigated single
asset risk by now boasting a portfolio of two exciting projects in
two pro-mining jurisdictions,” commented Chairman and Interim CEO,
Andrew Bowering. “Much of our group has considerable experience in
Mexico and we are excited to begin the work to unlock value at
Cinco de Mayo for all our stakeholders.”
Cinco de Mayo comprises 29 concessions totaling
approximately 25,000 hectares and is located in the north central
part of Chihuahua State, Mexico approximately 190 kilometres
(“km”) northwest of the state capital of Chihuahua
City in the Municipio de Buenaventura. The Project area is located
immediately west of the village of Benito Juárez and for the
purposes of exploration, benefits from excellent access via local
dirt roads.
Figure 1: Regional Map showing the
location of the Cinco de Mayo Project and other significant
deposits
The Project is prospective for and hosts
carbonate replacement type deposits (CRD) including the Upper Manto
Pb-Zn-Ag (Au) deposit, which consists of two parallel and
overlapping manto deposits referred to as the Jose Manto and the
Bridge Zone. The Project also hosts the Pozo Seco Molybdenum-Gold
(Mo-Au) deposit. The two deposits host distinctly different
mineralization with different commodities and are separated by four
(4) km.
As of September 1, 2012, 445 holes totaling
213,591 metres (“m”) had been drilled on the
Project by the previous operators, with no work completed since. Of
these, 151 holes totaling 97,610 m are located at or nearby the
Upper Manto deposit and were used to model the mineralization.
Roscoe Postle Associates Inc. (“RPA”) prepared a
technical report on the Project, dated November 14, 2012, which
includes a now historical inferred mineral resource. At an NSR
cut-off of US$100 per tonne the historical inferred resource was
estimated at 12.45 million tonnes of 132 g/t silver (Ag),
2.86% lead (Pb), and 6.47% zinc (Zn), 0.24 g/t gold (Au)
(see Table 1). The total contained metals in the historical
resource are 52.7 million ounces of silver, 785 million pounds of
lead, 1,777 million pounds of zinc, and 96,000 ounces of gold.
Figure 2: Oblique View Section
highlighting the high priority Pegaso Target and historical
resource estimate on the Project
A potential new discovery, called the Pegaso
Zone, was drilled in 2012. Consisting of 61.6 m of massive sulphide
in a deeper hole (CM-12-431), it was not included in the 2012
historical resource estimate (Figure 2). This intercept is
considered a high priority target and has potential to be a
significant new discovery. The Company’s initial review of
historical data suggests that the Pegaso Zone could indicate a
larger and higher-grade resource at depth.
As previously indicated, the Project also hosts
the Pozo Seco Mo-Au deposit, for which RPA prepared a historical
mineral resource estimate in 2010. At a cut-off grade of 0.022% Mo,
the historical indicated mineral resources were estimated at 29.1
million tonnes grading 0.147% Mo and 0.25 g/t Au, containing 94.0
million pounds Mo and 230,000 ounces Au, and a historical inferred
mineral resource estimated at 23.4 million tonnes grading 0.103% Mo
and 0.17 g/t Au, containing 53.2 million pounds Mo and 129,000
ounces Au (see Table 1).
Table 1: Historical Resource Estimates
for the Cinco de Mayo Project
Upper Manto Deposit, September 1, 2012, Mag Silver
Corporation (1) |
|
Tonnage (Mt) |
Gold (g/t) |
Silver (g/t) |
Zinc (%) |
Lead (%) |
AgEq (g/t) |
Gold (oz) |
Silver (Moz) |
Zinc (Mlb) |
Lead(Mlb) |
Inferred |
12.45 |
0.24 |
132 |
6.47 |
2.86 |
385 |
96,000 |
52.7 |
1,777 |
785 |
Pozo Seco Deposit, July 12, 2010, Mag Silver
Corporation (2) |
|
Tonnage (Mt) |
Gold (g/t) |
Molybdenum (%) |
Gold (oz) |
Molybdenum (Mlb) |
Indicated |
29.1 |
0.25 |
0.147 |
230,000 |
94.0 |
Inferred |
23.4 |
0.17 |
0.103 |
129,000 |
53.2 |
1 The Upper Manto historical mineral resource was estimated by
RPA with an effective date of September 1, 2012. Mineral resources
are estimated at an NSR cut-off value of US$100 per tonne. NSR
values were calculated in US$ using factors of $0.60 per g/t Ag,
$12.32 per g/t Au, $18.63 per % Pb and $14.83 per % Zn. These
factors are based on metal prices of US$27.00/oz Ag, US$1,500/oz
Au, $1.15/lb Pb, and $1.20/lb Zn and estimated recoveries and
smelter terms.
2 The Pozo Seco historical mineral resource was
estimated by RPA with an effective date of July 12, 2010. The
cut-off grade of 0.022% Mo was estimated using a Mo price of
US$17/lb and assumed operating costs and recoveries.
The historical mineral resources for the Upper
Manto and Pozo Seco deposits, discussed in this news release were
calculated prior to the implementation of current CIM standards for
mineral resource estimation (as defined by the CIM Definition
Standard on Mineral Resources and Ore Reserves dated May 10, 2014).
The reader is cautioned not to treat them, or any part of them, as
current mineral resources or reserves. The historical resources
have been included simply to demonstrate the mineral potential of
the Project. As part of the initial phase of work on the Project,
the Company intends to do a thorough review of all historical data
performed by a qualified person, along with additional exploration
work to confirm results, in order to produce a current mineral
resource estimate for the deposits. The Company is not aware of any
more recent estimates prepared for the Project.
The Project has not seen any modern work since
2012 when the previous operators, MAG, lost access to the property
due to a number of reasons involving community relations with local
stakeholders and social licensing requirements. Access to the
Project is currently restricted by the ejido assembly in the
region. Following completion of the Transaction, the Company
intends to actively work with the assembly and the local community
to regain access and obtain the necessary licensing to continue
exploration activities on the Project.
Transaction Terms
Pursuant to the terms of the Transaction, the
Company has been granted an option (the “Option”)
to acquire all of the outstanding share capital of 0890887 B.C.
Ltd. (“NumberCo”), a wholly-owned subsidiary of
MAG, which itself is the indirect controlling shareholder of MPS.
MPS is the sole registered and beneficial owner of the mineral
concessions comprising the Project. In order to exercise the
Option, the Company is required to obtain the necessary licensing
to access and conduct mining activities on the Project, and
subsequently complete no less than 20,000 m of exploratory
drilling, all within a five-year period (the “Option
Term”). Upon exercise of the Option, and subject to the
final approval of the TSX Venture Exchange, the Company will issue
to MAG common shares (the “Consideration Shares”)
equivalent to 19.9% of the then issued and outstanding common
shares of the Company, on a non-diluted basis.
During the Option Term, the Company will control
all exploration and development activities on the Project and will
be responsible for all expenses associated with maintaining the
Project in good standing. Following exercise of the Option, MAG
will be granted certain rights allowing it to participate in
subsequent equity interests to maintain its percentage ownership
interest in the Company. The Consideration Shares will be subject
to a four-month statutory hold period in accordance with applicable
securities laws.
The Company is at arms-length from MAG and MPS,
and no finders’ fees or commissions are payable in connection with
the entering into of the Option Agreement. In the event the option
is exercised, and the Project is acquired by the Company, a
finders’ fee equivalent to 3.5% of the value of the Consideration
Shares is due and owing to an arms-length third-party who assisted
in facilitating the Transaction. The finders’ fee is payable in
cash or common shares of the Company, or any combination, at the
discretion of the Company, and subject to the approval of the TSX
Venture Exchange. In the event any portion of the finders’ fee is
payable in common shares of the Company, the shares will be
issuable at an equivalent deemed price to the Consideration
Shares.
Qualified Person
The scientific and technical data contained in
this news release was reviewed and approved by Isabelle Lépine,
M.Sc., P.Geo., Apollo Silver’s Director, Mineral Resources. Ms.
Lépine is a registered professional geologist in British Columbia
and a Qualified Person as defined by National Instrument 43-101 -
Standards of Disclosure for Minerals Projects and is not an
independent of the Company.
About Apollo Silver
Apollo Silver has assembled an experienced and
technically strong leadership team who have joined to advance world
class precious metals projects in tier-one jurisdictions. The
Company is focused on advancing its portfolio of two significant
silver exploration and resource development projects, the Calico
Project, in San Bernardino County, California and the Cinco de Mayo
Project, in Chihuahua State, Mexico.
Please visit www.apollosilver.com for further
information.
ON BEHALF OF THE BOARD OF DIRECTORS
Andrew BoweringChairman and Interim President
& Chief Executive Officer
For further information, please
contact:
Andrew BoweringChairman and Interim Chief
Executive OfficerTelephone: +1 (604) 428-6128
Neither the TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release.
Cautionary Statement Regarding “Forward-Looking”
Information
This news release includes “forward-looking
statements” and “forward-looking information” within the meaning of
Canadian securities legislation. All statements included in this
news release, other than statements of historical fact, are
forward-looking statements including, without limitation,
statements with respect to the potential Transaction; the potential
to obtaining the necessary licensing to operate and perform
exploration activities; the potential to advance community
relations and regain access to the project, the potential to locate
and identify a larger and higher grade resource at depth; the
potential for new discoveries; geological interpretations and
historical resource estimates for the Project; future silver
recoveries; timing, successful commencement and execution of future
planned drilling and exploration activities. Forward-looking
statements include predictions, projections and forecasts and are
often, but not always, identified by the use of words such as
“anticipate”, “believe”, “plan”, “estimate”, “expect”, “potential”,
“target”, “budget” and “intend” and statements that an event or
result “may”, “will”, “should”, “could” or “might” occur or be
achieved and other similar expressions and includes the negatives
thereof.
Forward-looking statements are based on the
reasonable assumptions, estimates, analysis, and opinions of the
management of the Company made in light of its experience and its
perception of trends, current conditions and expected developments,
as well as other factors that management of the Company believes to
be relevant and reasonable in the circumstances at the date that
such statements are made. Forward-looking information is based on
reasonable assumptions that have been made by the Company as at the
date of such information and is subject to known and unknown risks,
uncertainties and other factors that may have caused actual
results, level of activity, performance or achievements of the
Company to be materially different from those expressed or implied
by such forward-looking information, including but not limited to:
risks associated with mineral exploration and development; metal
and mineral prices; availability of capital; accuracy of the
Company’s projections and estimates; realization of mineral
resource estimates, interest and exchange rates; competition; stock
price fluctuations; availability of drilling equipment and access;
actual results of current exploration activities; government
regulation; political or economic developments; environmental
risks; insurance risks; capital expenditures; operating or
technical difficulties in connection with development activities;
personnel relations; and changes in Project parameters as plans
continue to be refined. Forward-looking statements are based on
assumptions management believes to be reasonable, including but not
limited to the price of silver, gold and barite; the demand for
silver, gold and barite; the ability to carry on exploration and
development activities; the timely receipt of any required
approvals; the ability to obtain qualified personnel, equipment and
services in a timely and cost-efficient manner; the ability to
operate in a safe, efficient and effective manner; and the
regulatory framework regarding environmental matters, and such
other assumptions and factors as set out herein. Although the
Company has attempted to identify important factors that could
cause actual results to differ materially from those contained in
forward-looking information, there may be other factors that cause
results not to be as anticipated, estimated or intended. There can
be no assurance that forward-looking statements will prove to be
accurate and actual results, and future events could differ
materially from those anticipated in such statements. Accordingly,
readers should not place undue reliance on forward-looking
information contained herein, except in accordance with applicable
securities laws. The forward-looking information contained herein
is presented for the purpose of assisting investors in
understanding the Company’s expected financial and operational
performance and the Company’s plans and objectives and may not be
appropriate for other purposes. The Company does not undertake to
update any forward-looking information, except in accordance with
applicable securities laws.
Photos accompanying this announcement are available
at: https://www.globenewswire.com/NewsRoom/AttachmentNg/8187f49a-2284-4368-ba71-d07e98519ee2
https://www.globenewswire.com/NewsRoom/AttachmentNg/d0655a9e-25b0-40db-bc4b-e8c31ab00742
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