Tocvan Ventures has agreed to acquire a 2,172.7ha area located immediately adjacent and north of its Pilar Gold-Silver Project in Sonora, Mexico, from an undisclosed private title owner.
The area covers prospective zones that have so far been subject to limited exploration.
However, recent findings from placer mining indicate unexplored possibilities for gold and silver in the area.
Under the deal, Tocvan Ventures will make cash payments of $4m and issue 2.5 million Tocvan common shares over a period of five years.
Tocvan Ventures will also incur a total minimum work commitment of $1m over the agreement.
The title owner will retain a 2% net smelter royalty (NSR) on the properties acquired by Tocvan Ventures.
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Following the initial five-year term, Tocvan Ventures can elect to further extend the deal by ten years by initiating advanced royalty payments or acquire full title ownership by making an additional cash payment of $500,000.
Tocvan Ventures CEO Brodie Sutherland said: “To finalise this agreement is a major milestone for the company, completely changing our trajectory towards becoming a producer with significant resource potential.
“To now be able to explore a much larger area primed for new discoveries and provide immediate expansion potential to Pilar itself gives our shareholders added upside. The acquisition also gives us ample space for future mine infrastructure as we continue to advance Pilar towards production.
“We look forward to quickly evaluating this new area to begin aggressive drill campaigns targeting expansion and discovery.”