Mandalay Resources Corp. (TSX:MND, OTCQB:MNDJF), the metals miner, reported that it has completed the previously announced sale of its Cerro Bayo mine in Region XI, Southern Chile to Australia-listed Equus Mining Ltd (ASX:EQE) (Equus Mining Ltd (ASX:EQE)).
In October this year, it was reported that Equus had exercised an option from 2019 on the asset.
Equus has acquired the mine, including its mining properties, resources and mine infrastructure as well as a 1,500 tonnes per day (tpd) processing plant, in exchange for over 587.5 million Equus shares.
Mandalay will retain a 2.25% net smelter royalty (NSR) on production from the Cerro Bayo mining claims once the mine has produced at least 50,000 ounces of gold equivalent, subject to a repurchase option in favor of Equus.
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Mandalay remains responsible for 50% of approved site closure costs at Cerro Bayo. In addition, Equus will appoint Ryan Austerberry, Mandalay’s Costerfield mine general manager, to the Equus board as a non-executive director representing Mandalay.
"Mandalay is pleased to have successfully completed the sale of the Cerro Bayo mine to Equus. They are well positioned to move Cerro Bayo forward and we look towards mutually benefiting from the mine’s future developments," noted Dominic Duffy, the CEO of Mandalay.
Mandalay aims to create shareholder value through profitably operating both its Costerfield and Björkdal (Sweden) mines. It continues to mine the high-grade Youle vein at Costerfield, which supplies high-grade ore, and is also focused on extending Youle’s reserves at depth.
At Björkdal, Mandalay aims to increase production from the Aurora zone in the coming years, in order to maximize profit margins.
Contact the author at giles@proactiveinvestors.com