Canada's Maverix Metals (TSX-V: MMX) entered into a life of mine purchase and sale agreement this week for silver produced from the El Mochito mine, owned and operated by Ascendant Resources (TSX: ASND) in Honduras.
El Mochito's production guidance for 2019 is between 850,000 and 1,200,000 ounces of contained silver in concentrateIn a press release, Maverix said it will make an advance payment of $7.5 million for the right to purchase 22.5% of the silver produced from El Mochito and, subject to certain conditions, a further $7.5 million for an additional 17.5% of the silver produced. The company also committed to pay 25% of the silver price at the time of delivery, for each silver ounce delivered.
"This transaction is consistent with our stated strategy of acquiring long life precious metal streams that are immediately accretive to both our cash flow and net asset value," Dan O'Flaherty, CEO of Maverix, said in the media statement.
The El Mochito mine is located on a 10,000-hectare land package near the town of Las Vegas in north-western Honduras.
It is a 2,300-tonne per day, underground zinc-lead-silver operation expected to grow to a 2,800-tonne per day operation following a 2018 expansion and optimization PEA. The assessment outlined a 10-year operation with an increased production capacity of 1 million tonnes per annum and an expected output of nearly 600,000 ounces of silver per year.