Tocvan Ventures Corp (CSE:TOC) (FRA:TV3) is poised to acquire the El Picacho project in Mexico, where five gold targets have previously been defined, for US$1,989,600 in cash over five years.
The company has inked a letter of commitment with Millrock Resources (CVE:MRO) to acquire the option agreement on the road-accessible asset, which sits in the Caborca orogenic gold belt, and is fully permitted for trenching and drilling.
READ: Tocvan Ventures says it is 'extremely pleased' with early stage drill results at flagship Pilar project
"We are extremely excited to announce the agreement to acquire the El Picacho Gold Project," said Tocvan CEO Derek Wood in a statement.
"Tocvan sees this as a tremendous opportunity to add to our portfolio of strong gold assets and El Picacho will be the perfect complement to Pilar. The amount of quality exploration work completed to date on the project provides Tocvan with several gold targets that can be advanced to drill ready status quickly. We look forward to advancing El Picacho while we continue to unlock the potential of Pilar," he added.
Tocvan noted that five targets have historically been defined at the 2,413 hectare (Ha) property, namely, San Ramon, Tortuga, El Puerto, La Cornea, and El Jabali.
It pointed out that 2,650 rock samples have previously been collected, 32 of which showed greater than 10 grams per ton (g/t) gold, with 189 samples showing over 1 g/t of the precious metal.
El Picacho sits 18 kilometres southwest of the San Francisco mine in Sonora, which started producing commercially in 2010 and hosts more than 3 million ounces (Moz) of gold at a grade of 0.52 g/t in two open pits.
Under the deal, an initial payment of US$78,000 will be due from Tocvan upon signing. A total of US$1,989,600 will be paid over five years to acquire a100% interest in the project.
Millrock is to retain a 2% NSR (net smelter royalty) with the option for Tocvan to buy back 1% of that for US$1,000. Upon full execution of the option, an annual advance minimum royalty (AAMR) of US$25,000 will be paid to Millrock, doubling each year until the start of production.
The deal is subject to an additional 60-day due diligence period effective from June 7, 2021.
Tocvan is earning into two opportunities - the Pilar Gold-Silver project in Sonora, Mexico and the Rogers Creek Copper project in British Columbia. The company reckons both represent 'tremendous' opportunity to create shareholder value.
Contact the author at giles@proactiveinvestors.com