VANCOUVER - Southern Silver Exploration (TSXV:SSV) says it plans to acquire a full interest in the San Juan gold-silver project in Sinaloa, Mexico, by paying US$1 million over four years.
The company said Thursday it has signed a letter of intent with an unnamed private company, under which Southern Silver pays an initial US$50,000 cash payment with escalating payments every six months. The agreement doesn't include a net smelter royalty.
The property has eight concessions covering 1,850 hectares in the Sierra Madre mineral belt in northwestern Mexico.
The lack of a smelter royalty "is consistent with the company's objective of acquiring ownership of quality projects in established mineral districts with significant exploration (and) development potential and with minimal downstream encumbrance," said Southern Silver president Lawrence Page in a release.
Southern Silver added that recent drilling by the project's previous owner showed values ranging from narrower higher-grade intervals of up to 27.3 grams per tonne gold over three metres to thicker intervals of mineralization ranging from 0.6 grams per tonne gold over 15 metres to 3.9 grams per tonne gold over 27 metres.
The company expects initial drill testing of high-priority targets to start in the second quarter.
Shares in the company were unchanged at 17.5 cents on the TSX Venture Exchange.