Argonaut Gold (TSX: AR) has inked a deal with Heliostar Metals (TSXV: HSTR) to sell its Ana Paula gold project in Guerrero state, Mexico for US$30 million in cash and shares. The announcement comes 20 months after a planned sale of the asset to AP Mining fell through in April 2021.
Under the agreement, Heliostar will pay US$10 million upfront; US$5 million in shares upon renewing the open-pit mining permit or obtaining a new underground mining permit; US$2 million upon completion of a feasibility study or July 1, 2024 (whichever comes first); US$3 million in cash and $2 million in cash or shares preceding the construction announcement; and US$5 million plus US$3 million in cash or shares preceding the announcement of commercial production.
In return, the Vancouver-based exploration company will acquire all issued and outstanding shares of Aurea Mining, an Argonaut subsidiary that holds a 100% indirect interest in Ana Paula.
Larry Radford, Argonaut Gold president and CEO, commented in a news release that the sale would allow the company to focus on its Magino mine, located 40 km northeast of Wawa, Ont., which it says will transform Argonaut into a “low-cost, intermediate producer.”
Argonaut acquired Magino in 2012 and the asset is currently under construction. The company raised $195.3 million this year to help finance the over-budget project, which is now expected to cost $920 million to complete. Magino has proven and probable reserves of 58.9 million tonnes grading 1.13 grams gold per tonne for 2.1 million contained ounces and a 19-year expected mine life.
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