El Salvador president proposes bill to overturn metals mining ban
In 2017, El Salvador became the first country in the world to ban forms of metals mining.
Precious metals producer Hochschild Mining (LON: HOC) is expanding its presence in Brazil by exercising an option to buy Cerrado Gold’s (TSX-V: CERT) Monte Do Carmo project for up to $60 million.
The South America-focused miner said its subsidiary Amarillo Mineração do Brasil will pay $30 million, with further payments of $15 million upon certain milestones being reached.
Cerrado received in March a $15 million secured loan from Hochschild at a 10% interest rate, as part of the agreement for the project located in the central state of Tocantins.
This strategic acquisition, expected to close on Nov. 5, aims to boost Hochschild’s growth pipeline, leveraging the project’s gold resources and advanced permitting status, the company said.
Hochschild already has an operating gold mine in Brazil, Mara Rosa, which poured its first gold in February, reaching commercial production in May.
“Following the successful commissioning and ramp-up of Mara Rosa, I am delighted that we have been able to move the Monte do Carmo project from option status to a fully integrated part of our project pipeline,” chief executive officer Eduardo Landin said in the statement.
“We have conducted an extensive exploration and twin drilling programme which has returned encouraging results giving us confidence in our ability of defining a compelling project,” Landin noted.
The Monte Do Carmo project holds 21 mineral concessions over 82,542 hectares, and hosts multiple identified gold targets along a 30 km mineralized trend. These include the Serra Alta gold deposit, which has measured and indicated resources of 1,012k ounces of gold and inferred resources of 66,000 gold ounces and was the subject of a feasibility study in October 2023.
According to the study, Monte Do Carmo can generate an annual average output of 95,000 gold ounces during a nine-year life. Initial capex is estimated at $262 million and at a $1,750/ounce gold price, the payback should happen in just over two years.
