E2M Metals’ (ASX:E2M) shareholders are taking interest on Friday trade as the company acquires 100% of Austral Gold’s (ASX:AGD) Pingüino silver-gold project in Argentina; which boasts a resource of 51Moz of ore for 32Moz of silver and 219Koz of gold.
E2M is paying Austral roughly $7.4m (US$5m) for the project, as well as handing it 15m options in E2M plus 19.99% of E2M’s shares wholemeal.
An upfront payment of US$2.5m from E2M to Austral is part of the deal.
Becoming E2M’s largest shareholder, Austral will retain the right to appoint one board member.
Austral will also retain the option “to purchase either all of half of the existing 2% Net Smelter Royalty on the project.”
On its website, Austral describes the project as a silver-gold project in an advanced stage of development located on a “vein field” with a strike length of some 115km with year-round access and close to existing infrastructure.
Austral also notes no near-by communities are present and that it owns 70% of the surface land—now to E2M.
The play is located in Argentina’s Santa Cruz province, a region with no shortage of historical and concurrent mining activity.
The project itself is made up of four different mining titles at a total of 9.9K hectares 35km north-northwest of AngloGold Ashanti’s (ASX:AGG) Cerro Vanguardia silver-gold mine.
E2M Metals already holds acreage in Argentina nearby at its Conserrat project; and its acquisition of the Pingüino project allows it to ultimately consolidate landholdings into one larger project.
This will be complemented, the company notes, by E2M’s inbound maiden mineral resource estimate for Conserrat expected in the first quarter of next year.
“The consolidation of Pingüino and Conserrat creates a single company with the largest undeveloped silver resource in Santa Cruz,” E2M MD Todd Williams said.
Silver is itself a metal with applications in the EV industry, given that the metal is the most conductive on earth—something Boab Metals (ASX:BML) highlighted earlier this year.
“The Company remains in a strong financial position and will fund the upfront cash payment from the Company’s current cash reserves,” Williams added.
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