The Company has entered into a definitive agreement with Minera Contracuña I, S.A. de C.V. and Vetalinda Compania Minera, S.A. de C.V. (together "Contracuña"), pursuant to which Contracuña has granted Santacruz the right for thirty years to explore, mine and operate Contracuna's Veta Grande and Minillas silver-gold-zinc-lead mineral properties which cover approximately 1,100 hectares within the State of Zacatecas, in central Mexico.

Operational Highlights of the Agreement
  • Access to additional mineralization feed for the Rosario Mine milling facility to take advantage of unused capacity and realize immediate increased cash flow to the Company.
  • Synergistic distance of 180 kms between Rosario Mine and Contracuņa properties which will allow for future streamlining of operating and management functions.
  • Access to a 500 tpd fully permitted operational mill, which requires minor adjustments including two additional flotation cells and additional pipe systems to produce both lead and zinc concentrates (currently producing a single bulk concentrate).
  • Operations located in one of Mexico's most prolific silver, lead, zinc and copper regions in Mexico, which includes the Fresnillo Silver Mine, the Madero Mine (operated by Peņoles) and the Cozamin Mine operated by Capstone Mining Corporation.
  • Located near the Capital city of Zacatecas with excellent highways system, power, water, and specialized mining workforce.
Agreement Terms
  • An initial term of 15 years, with an additional 15 year term extension at the Company's option at the end of the original term.
  • Santacruz must make cash payments of US$200,000 on execution of the agreement (paid) and an additional payment of US$300,000 upon registration of the agreement with the Deputy of Mines, which is expected to occur in 2016.
  • Santacruz to operate the properties on a 60%/40% net profits interest basis ("NPI") with Santacruz holding 60% and Contracuņa holding 40%.
  • In the event the price of silver is greater than USD$22.00/ounce, the NPI changes to 55%/45%.