Luca Mining (TSXV: LUCA,OTCQX:LUCMF) has agreed to acquire the El Barqueño gold-silver-copper project in Mexico from Agnico Eagle Mines (TSX:AEM,NYSE:AEM) for an initial US$10 million in stock and up to US$50 million in deferred milestone payments.
Under the definitive asset purchase agreement, Luca will acquire 100 percent of the 32,000-hectare property located in Jalisco state, roughly 100 kilometers west of Guadalajara.
The consideration structure includes a US$10 million upfront equity payment, followed by up to US$30 million in milestone-linked disbursements. Luca will pay US$15 million three months after commencing its first drilling program at the site and another US$15 million upon reaching commercial production.
Luca maintains the sole election to settle the contingent payments in cash, stock, or a combination of both. An additional US$20 million in production-linked payments will trigger at a rate of $5 million for every 100,000 gold equivalent ounces produced, capped at a maximum of 400,000 ounces.
“The acquisition of El Barqueño will be a highly strategic and accretive transaction for Luca,” Luca CEO and Director Dan Barnholden said. “We are excited to add a high-quality, high-grade gold-silver-copper development project to our portfolio of mining assets in Mexico.”
A direct amparo proceeding, or a Mexican legal mechanism to challenge government actions on constitutional grounds, remains ongoing before the Fourth District Court for Administrative Matters in Jalisco to address the program’s application to concessions granted prior to its creation.
The property carries a historical 2025 mineral resource estimate totaling 399,265 indicated ounces of gold equivalent at 1.47 grams per ton, alongside 650,046 inferred ounces at 1.43 grams per tonne.
The figures are strictly treated as a historical estimate under National Instrument 43-101 standards, noting that a qualified person has not completed sufficient work to classify it as a current mineral resource.
Agnico Eagle initially consolidated the El Barqueño property by acquiring Cayden Resources and Soltoro Ltd. in 2014 and 2015. The senior gold producer subsequently completed approximately 225,000 meters of exploration drilling between 2015 and 2018.
The company also recently deployed capital into earlier-stage assets elsewhere. Last month, Agnico committed C$57.1 million to acquire a strategic position in Radisson Mining Resources (TSXV:RDS,OTCQX:RMRDF), financing an advanced underground exploration program and access ramp construction at the O’Brien gold project in Québec’s Abitibi region.
Following the sales news, shares of Luca Mining were trading at C$1.09 as of 3:20 p.m. ET, while shares of Agnico were moving for C$282.01.
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Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.
