SilverCrest Mines (CVE:SVL)(NYSE MKT:SVLC) says it has exercised its option to acquire a 100 per cent interest in the nine La Joya West concessions, which together stretch over 529 hectares southeast of the city of Durango in Mexico.
The nine La Joya West concessions, together with the three La Joya East concessions - in which the company also has an option to acquire a 100 per cent interest - and five other concessions staked by SilverCrest, make up the La Joya project, which is roughly 10,660 total hectares.
The company said Monday it exercised the option by making a final payment of US$2.5 million to the concession owners, one half of which was paid in cash, while the remainder was paid in 615,776 common shares of SilverCrest at C$2.06 apiece.
"The La Joya West concessions contain the large La Joya silver-copper-gold resource as well as the Coloradito tungsten-molybdenum deposit," said president J. Scott Drever in the release on Monday.
"Exercise of the option is consistent with SilverCrest's ongoing strategy of acquiring 100% ownership in its projects once substantial shareholder value has been created at minimal financial risk."
Indeed, the company has already started a preliminary economic assessment at La Joya to determine the potential for development of a higher grade starter pit, with a conventional processing facility.
The silver miner is rapidly advancing the delineation of a large polymetallic deposit at La Joya, where in March it filed an NI 43-101 compliant technical report for the resource update. At a global case cut off grade of 15 grams per tonne of silver equivalent, inferred resources at La Joya stand at 198.6 million ounces, almost 95% higher than the 101.9 million ounces at the same cut off grade previously.
Under the exercise agreement for the La Joya West concessions, the concession owners will retain a 2 per cent net smelter return royalty from mineral production on the property covered by the concessions.
SilverCrest ended the latest quarter with cash and equivalents of $41.1 million, and with working capital of $48.9 million, having budgeted $53.2 million of capital for the year for the new processing facility at its flagship Santa Elena mine in Mexico.
It is aiming to complete the construction of a new 3,000 tonne per day processing facility at Santa Elena on schedule and on budget for the first quarter of 2014 as a means to double output. It spent $10.7 million on the project in the latest period that ended in March.
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