Royal Road Minerals (CVE:RYR) has struck a deal to acquire a Colombian gold mine, where it reckons it could define a high-grade resource of over a million ounces.
The Toronto-listed firm has entered an option agreement with Richard Ignacio Apraez Caicedo and Anastasio Ademelio Solarte Rodriguez to acquire 100% of La Golondrina, it said in a statement.
It plans to kick off work at the site, which is already producing on a small scale, by surveying all accessible underground workings, completing channel samples and defining targets for surface drilling as early as possible in 2016.
Royal Road's chief executive and president Dr Tim Coughlin, told investors that La Golondrina ticked a number of boxes for the mining junior.
"Firstly, the gold grade in the veins and in the vein zones offers the potential for the possible development of a substantial and highly profitable high-grade underground or open-pit mining project," he said.
"Secondly, there are three permitted and operating CIL facilities within close proximity to the project; thirdly, our relationship with the current owners offers the company a head start in a number of important areas, including, community relations, and fourthly, the La Golondrina project is located in a prolific high-grade gold producing area where there may be opportunities for the company to evaluate and, if deemed advantageous, acquire other mineral properties," he said.
The property has seen no drilling or systematic exploration, says the firm, which believes it can define a significant high-grade plus million ounce resource.
From a modest capital investment, it reckons it can modernise and expand current operations and achieve relatively early cash flows.
The current contract for the 400 sq km La Golondrina concession granted to the optionors in 2007 is valid for 30 years.
In order to exercise the option, Royal Road must meet certain terms, including paying to the optionors US$30,000 within three days of the effective date of the agreement and a total of US $50,000 on or before the date it first starts drilling on site.
It must also carry out exploration work on or before the third anniversary, including detailed surveying and sampling of the mine site and surrounding veins, and complete a minimum of 1,500 meters of drilling.
Royal Road shares were unchanged at C$0.07.