Junior exploration company Tarachi Gold announces that it has signed a binding letter agreement with Compañia Minera de Atocha S.A. de C.V., a private Mexican mining company with producing mines in the states of Durango and Zacatecas, for the sale of the Company’s Magistral Project in Durango, Mexico.
The Company will also be cancelling its private placement, previously announced on December 14, 2022. Upon closing the transaction proposed in the Letter Agreement, Tarachi will transfe 100% ownership of its TGMEX Silver S.A. de C.V., which owns all of the Company’s assets related to the Magistral Project, to Atocha. In exchange, Atocha will make cash payments of approximately US$5,700,000.
The Magistral project includes a 1,000 tons a day mill as well as access to a tailings deposit that has measured and indicated resources of 1.26 million tons at a grade of 1.93g/t Au.
“This transaction represents an opportunity for Tarachi to convert our interest in the Magistral Project to hard dollars at a strong valuation,” commented Cameron Tymstra, Tarachi President and CEO. “It has been a challenging year for the junior gold sector and difficult to raise money through traditional means for project development, particularly for assets with shorter mine lives such as the Magistral Project. We are excited to be moving forward following the close of the Transaction with a strong cash position which will provide us with the flexibility to pursue other gold assets in North America with superior value-creation potential.”