The project covers 1,012.73ha and is located 70km from Puerto Vallarta and 25km from Tepic. Credit: WILLIAM LUQUE/Shutterstock.com.

Silver Sands Resources has signed a definitive agreement to secure a 100% interest in the Fairfield Gold Project in Mexico’s State of Nayarit, from Fairfields Gold.

The project spans 1,012.73 hectares (ha) and is positioned roughly 70km north-east of Puerto Vallarta and 25km south-west of Tepic.

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The agreement will involve cash payments of around $675,000 and the issuance of 5.15 million common shares over four years.

These concessions also include a 2.5% net smelter returns royalty, with an option for Silver Sands to repurchase 1.5% of this royalty for $1m.

Before finalising the transaction, Silver Sands’ Mexican subsidiary will establish an agreement with the prior owner regarding the royalty terms and the repurchase right.

The Fairfield Gold Project is situated on the northern edge of a Cretaceous hornblende granodiorite pluton with associated base and precious metal mineralisation.

Initial exploration by the American Smelting and Refining Company (ASARCO) from 1926 to 1935 identified mineral deposits along the Miravalles Vein, with gold averaging 31.2 grams per tonne (g/t) and silver 401g/t.

To facilitate the agreement, Silver Sands has agreed to issue 1,050,000 common shares to a third party as a finder’s fee.

This issuance is contingent upon approval from the Canadian Securities Exchange (CSE) and will adhere to statutory hold periods as required by securities regulations and CSE policies.

The agreement is pending various regulatory approvals including the need for the CSE’s endorsement.

Silver Sands CEO Keith Anderson said: “The Fairfield Gold Project represents an excellent opportunity in a strong mining-friendly jurisdiction for Silver Sands.

“Historical exploration by ASARCO reported gold and silver mineralisation in the Miravalles Vein, while parallel vein structures have only been minimally explored, highlighting the broader exploration potential of the project.”