The mill facility has a 430 tpd capacity at present, construction underway to increase to 750 tpd
Veta Grande Purchase Agreement
Santacruz has acquired from Minera Contracuña I, S.A. de C.V. and Vetalinda Compañia Minera, S.A. de C.V. (together "Contracuña") 100% ownership of the Veta Grande Project, including the Veta Grande mine, milling facility and adjacent properties as well as the Minillas Property, all located in Zacatecas, Mexico. The Veta Grande mine and adjacent properties plus the Minillas Property cover approximately 1,100 hectares within the State of Zacatecas, in central Mexico.
Details of the payment schedule to Contracuña are as follows:
- US$500,000 paid on December 13, 2017 (paid);
- US$500,000 on or before December 13, 2018;
- US$2,500,000 on or before December 13, 2019;
- US$2,500,000 on or before December 13, 2020;
- US$5,000,000 on or before December 13, 2021; and
- US$4,500,000 on or before December 13, 2022;
In addition the Company has granted to Contracuña a 1% net smelter royalty ("NSR") that commences December 14, 2022. The Company has the right to acquire the NSR at any time by paying Contracuña US$1,500,000.
Golden Minerals Option Agreement
Santacruz has an option to acquire from Golden Minerals Company ("Golden Minerals") certain mineral claims located in the Zacatecas Mining District, Zacatecas, Mexico (the "Zacatecas Properties").
The Zacatecas Properties are located at the periphery of the Zacatecas, Veta Grande, Guadalupe, Pánuco, and Morelos municipalities in the state of Zacatecas, Mexico and consist of 149 concessions covering approximately 7,800 hectares.
Details of the payment schedule to Golden Minerals are as follows:
- US$829,000 paid to date;
- US$225,000 on or before March 15, 2018;
- US$225,000 on or before June 15, 2018; and
- US$225,000 on or before September 15, 2018.
A 1% net smelter royalty exists with the original property vendors on some of the claims included in the Zacatecas Properties.
Zacatecas Option Agreement
The Company has entered into a binding letter of intent (the "LOI") with Carrizal Mining, S.A. de C.V. ("Carrizal"), a private Mexican silver producing Company, to sell Carrizal a 20% working interest in the Veta Grande Project as well as the Zacatecas Properties (collectively the "Zacatecas Mineral Assets").
Carrizal may earn its 20% working interest by:
- Funding 100% of the cost to increase the capacity of the Veta Grande mine and milling facility to 750 tpd (expected to be by early Q2 2018); and
- Providing a surface diamond drill rig and drilling materials to conduct exploration drill campaigns at the Veta Grande mine, proximate to the Company's current mining activities, and at the Navidad property and Panuco Deposit.
In addition Carrizal has provided a short-term working capital advance of US$500,000. Following Carrizal completing the required earn-in expenditures, a 20:80 joint venture between Carrizal (20%) and Santacruz (80%) will be formed.