Tocvan Ventures Corp. (CSE:TOC) announced that it has signed a definitive agreement to acquire 100% of 2,172.7 hectares immediately adjacent and north of its Pilar gold-silver project in Mexico.
The exploration development company said the area includes highly prospective zones that have seen limited exploration to date, although recent placer mining suggests untested gold and silver potential.
"To finalize this agreement is a major milestone for the company, completely changing our trajectory towards becoming a producer with significant resource potential," Tocvan Ventures CEO Brodie Sutherland said in a statement.
"The acquisition also gives us ample space for future mine infrastructure as we continue to advance Pilar towards production," he added.
The company noted its technical personnel have already completed initial field reconnaissance to evaluate new target areas, with results pending.
In consideration for the acquisition, Tocvan will make cash payments totaling US$4 million and issue 2.5 million of its common shares over the five-year term of the agreement.
The company will also complete a minimum work commitment of US$1 million, with the title owner retaining a 2% net smelter return (NSR) royalty on the properties acquired.
Tocvan added that after the initial five-year term it can elect to extend the agreement an additional 10 years by starting advanced royalty payments or purchase full title ownership through an additional cash payment of US$500,000.
Tocvan Ventures is a well-structured exploration development company earning 100% into two exciting opportunities in Sonora, Mexico: the Pilar Gold-Silver project and the El Picacho Gold-Silver project.
Shares of the company closed 2.1% higher on Wednesday in Toronto.
Contact Sean at sean@proactiveinvestors.com