Collective Mining (TSX: CNL) has cleared a major strategic hurdle by acquiring the remaining surface rights needed for its Guayabales project in Colombia. The move effectively de-risks the site for future development, providing the company with the ability to move toward underground exploration and eventual production.
Total consideration under the transaction amounts to US$44.0 million, with $8.7 million to be paid upfront. The transaction is to be settled in cash, with Collective to make payments over a five year term. If approvals are granted for the construction of a mine prior to the final payments being made, the remainder will become immediately due and payable.
“Completing the acquisition of all surface land required for a future mining scenario at our Guayabales Project is a major step towards realizing our vision of developing a major critical mineral mining operation in Colombia.,” said Ari Sussman, Executive Chairman of Collective Mining.
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“We envision a future mine for the Apollo System, which is a polymetallic deposit enriched in gold, copper, tungsten, and silver, that will be modern, have a modest surficial footprint, and will adhere to the highest standards of environmental stewardship.”
The near-term focus of the acquisition is the commencement of an exploration adit. This underground adit will allow the company to enhance their understanding of the geological system while cutting down on drilling costs. Initial exploration is to be centered on the Trap system, which has been sparsely drilled to date due to challenging steep topography – a problem which is eliminated when drilling from underground.
Construction of the adit is expected to begin in the fourth quarter.
Collective Mining last traded at $24.74 on the TSX.
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