Para Resources has signed an agreement with Mojave Desert Minerals to acquire the Gold Road mine located in Oatman, Arizona, US.
Para will make an aggregate payment of around $6.76m under the agreement, including $767,540 to be paid at the closure of the deal.
The Gold Road mine is a fully permitted asset that has produced more than 700,000oz of gold and operated as recently as 2016.
Para Resources president Ian Harris said: “Gold Road leverages the experience of Para’s management team to rehabilitate and operate underground epithermal gold vein mines.
“Within the next six months from the closing, with the assistance of external consultants, Para expects to establish a current resource estimate and file an NI43-101 technical report.”
A preliminary economic assessment is expected be conducted in the future to determine the asset's full potential.
The agreement will enable the company to acquire all of the mine's patented and unpatented claims, as well as the mill site and water rights claims.
Para will also take ownership of the site's mining and milling equipment, including a 500 tonnes per day (tpd) cyanide leach facility.
The acquisition is expected to be completed next month.
Para offer a net smelter returns (NSR) royalty of 2% in relation to gold produced from the mine as part of the agreement, in addition to a 1% NSR royalty on products processed at the Gold Road mill.
The Gold Road site recently permitted more than 20 years of additional dry stack tailings capacity.
The transaction is consistent with Para’s wider acquisition strategy, and the company expects to produce more than 100,000oz of gold by 2020.
Image: Under the terms of the deal, Para Resources will acquire the Gold Road mine, a 500 tonnes per day cyanide leach mill and other assets. Photo: courtesy of Para Resources Inc.