By Samantha James
September 1, 2015
AUSTRAL Gold is poised to become a “leading regional player” in South America by securing 37 precious metal tenements in Argentina.
The company planned to acquire 100 per cent of TSX Venture Exchange (TSX-V) listed explorer Argentex Mining Corporation.
Austral, a former diamond-turned-metals producer, already holds a 19.9 per cent interest in Argentex, which owns more than 107,000 hectares of land in the Santa Cruz and Rio Negro provinces.
Argentex’s flagship Pinguino silver-gold project is located in the south and has a non-JORC indicated resource estimate of 26.7 million ounces of silver equivalent at grades of 103.4 grams per tonne of silver and 0.58g/t of gold.
Austral’s Guanaco underground mine in Chile produced 51,535 ounces of gold in fiscal 2015 at an average of US$597 per gold-silver equivalent ounce, leaving it US$7 million in cash as of 30 June, 2015.
The companies signed a binding agreement for the acquisition of the remaining 80.1 per cent interest in August via a share-for-share exchange that would value Argentex at CAD0.08 per share or around CAD5.8 million.
Following completion, Austral planned to list on the TSX-V to widen its investor base in North America.
“The proposed acquisition of Argentex Mining represents another step in our objective of becoming a broad-based precious metals company and a leading regional play in South America,” Austral Gold chairman Eduardo Elsztain said.
“We believe now is the right time to pursue a listing on the TSX-V as this will give us access to a wider investor base in North America where our group of companies has a well-established and strong reputation.”.
Austral holds more than 30 exploration properties in Argentina in its own right and is also developing the Amancaya project in Chile, where it is currently working on submitting an Environmental Impact Statement in preparation for a proposed 100,000 ounce per year mining operation.
It also holds 12.8 per cent of Goldrock Mines, which is developing the Lindero gold deposit in northwestern Argentina.