Galane Gold has signed an agreement with Pyramid Peak Mining to acquire the Summit gold-silver mine in New Mexico, US.

Under the agreement, Waterton Precious Metals Fund II Cayman wholly owned subsidiary Pyramid Peak Mining will sell the Summit mine and the infrastructure constituting the Banner Mill in New Mexico to Galane Gold.

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Galane Gold CEO Nick Brodie said: “The Galane Gold management team is excited with the opportunity of restoring another mining operation to economic production. We have successfully done this twice already at our Mupane and Galaxy properties.

“The acquisition of the Summit Mine is another step in our corporate goal to reshape the company into a long-life and low-cost operation that can produce positive returns for investors across commodity cycles.

“This operation represents a perfect example of this representing an opportunity to increase Galane Gold’s production, lower its operating costs and reduce its country risk.”

Located in the Steeple Rock Mining District, within Grant County, the Summit mine comprises approximately 4,000 acres of patented and unpatented mining claims and mining leases.

The past-producing mine, which is currently on care and maintenance, is allowed to resume operations.

According to the deal, Galane Gold will make an initial $6m ($4.7m) payment at the closing of the acquisition.

Subject to certain conditions and approval of governmental and regulatory authorities, the deal is planned to be completed next month.

Galane Gold said it also closed the previously signed engagement letter with Canaccord Genuity for a C$9.68m ($7.6m) private placement of subscription receipts of the company.

The net proceeds of the offering will be used by Galane Gold to fund the initial cash consideration of the mine acquisition.

On behalf of a syndicate of agents, including Research Capital, Canaccord Genuity served as lead agent for the private placement.