MEXICO – Toronto’s AGNICO-EAGLE MINES has exercised its option to acquire 100% of the Pinos Altos gold project from INDUSTRIAS PENOLES. Agnico will pay Penoles US$32.5 million in cash, 1.8 million common shares plus another US$6.5 million worth of shares to be valued closer to closing on March 15.
The Pinos Altos project lies in the Sierra Madre gold belt, 270 km west of Chihuahua. Preliminary assessment considered a 3,000-tonnes/day open pit and underground operation. The mill would use conventional Merrill-Crowe technology. The capital cost might be in the range of US$150 million. Indicated resources stand at 12.5 million tonnes at 3.9 g/t Au and 102 g/t Ag. Inferred resources are 3.2 million tonnes at 5.2 g/t Au and 111 g/t Ag. Drilling continues with two rigs.
Assuming drilling results continue to be positive, Agnico will accelerate its work program with the aim of completing a bankable feasibility study by the middle of 2007. Follow progress at Pinos Altos by reading news releases posted at www.Agnico-Eagle.com.