Regency Silver Corp. (TSX-V:RSMX) said it has entered into an option agreement with AsiaBaseMetals Inc to sell a 70% interest in its wholly-owned Paisano Gold Project in north-central Peru.
The company noted that the project covers approximately 2,700 hectares in the prolific La Libertad Mining District, a district hosting several multi-million ounce precious metals deposits.
The project sits alongside various operating mines within a 5 kilometre (km) radius, including former Barrick Gold mine Lagunas Norte and La Arena, a mine owned by Pan American Silver Corp. Other mines within a 30 km radius of the property include Pan American Silver's Shahuindo open pit mine.
"We are pleased to enter into this option with AsiaBaseMetals Inc, which will allow us to jointly unlock the potential of the Paisano Project,” executive chairman Bruce Bragagnolo said in a statement.
“When standing on a high point of land in this prolific mining district in Peru you can see multiple large open-pit mining projects. The proximity of the Paisano Project to such large mines as Lagunas Norte and La Arena is indicative of the potential of this project,” he added.
The company said AsiaBaseMetals may earn a 70% interest Paisano by making cash payments of approximately US$3 per hectare over three years commencing in 2023 to keep the property in good standing; issuing Regency with a total of 250,000 common shares over three years; and incurring at least C$1 million in exploration expenditures on the property, including C$200,000 on or before May 25, 2024, and the additional sum of C$800,000 on or before May 25, 2025.
AsiaBaseMetals may elect to issue shares instead of expending money on exploration, the company added. Such shares will be priced at the greater of $0.17 per share or the closing price of the stock on the TSX Venture Exchange, or such other exchange on which the shares are then principally traded, on the trading date immediately preceding the date on which notice of such an election is delivered.
AsiaBaseMetals CEO Raj Chowdhry said the option agreement will enable the company to enter the mining sector in South America and to further develop and build its presence in the region.
“This will allow us to continue to create and seize further opportunities,” Chowdhry added. “The Paisano Project allows the Company immediate access to one of the highest-rated mining regions, not only in Peru but the world. I'm sure that with the continued support of our shareholders, the company's entry into Peru will be rewarding. We look forward to jointly developing the Paisano Project, in the prolific La Libertad District.”
In the event the option is exercised, Regency Silver said the parties will enter into a joint venture with their respective interests being 70% AsiaBaseMetals and 30% Regency Silver.
Regency Silver Corp is a silver and gold exploration company focused on the Americas. The company is led by a team of experienced professionals with expertise in both exploration and production. Its flagship project is the Dios Padre silver project in Sonora, Mexico.
Contact the author at stephen.gunnion@proactiveinvestors.com