Magellan Gold has signed a stock purchase agreement (SPA) for Rose Petroleum's mineral processing mill operation in San Dieguito de Arriba, Nayarit State, Mexico, and associated assets, licences, and contracts.
Under the agreement, Magellan will pay $1.5m, comprising $1m in cash and $500,000 in stock to gain the assets collectively called SDA Mill.
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Magellan Gold CEO Pierce Carson said: "Acquisition of the SDA Mill will transform Magellan into a production company and will be an exciting development for our shareholders.
"Our strategy following the acquisition will be to resume processing operations, build production and increase cash-flow."
The SDA Mill is a fully operational flotation plant that also includes a precious metals leach circuit and associated assets, licences, and agreements.
Operating for ten years, the mill has an ore processing capacity for up to 200t a day.
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By GlobalDataOperations at the mill are driven by sales of flotation concentrates to smelters, and payment for precious metals content.
Milling activity has been suspended to facilitate completion of the transaction.
Magellan controls two precious metals exploration properties located in Arizona, US, and in Peru.
The company’s Silver District property in south-west Arizona covers 2,000 acres and contains a near-surface historical drilled resource of 16 million ounces of silver and holds potential for expansion.
The company has the right to earn a 50% interest in Niñobamba silver-gold property, which spans 9,027 acres and is located in central Peru.
