Fresnillo exercises option to buy Naranjillo property

Naranjillo project. Credit: Plata Latina

Mexican silver major Fresnillo has exercised its option to purchase the Naranjillo property from Vancouver's Plata Latina Minerals (TSXV: PLA). Naranjillo is a grassroots epithermal silver discovery located in the Mexican Silver Belt, approximately 35 km southeast of the Guanajuato mining district.

Plata Latina also controls three other exploration ready properties along the Mexican Silver Belt, including Vaquerias, La Joya and Palo Alto.

The option stems from an agreement signed in 2017 that provided Fresnillo subsidiary Metal??rgica Reyna with a three-year term during which it can conduct exploration and exercise the option.

In the option period, Reyna had to pay $1.65 million in stages for the right to explore the property. Reyna was also required to spend a minimum $3 million in exploration during that time.

In January, before the end of the three-year period, Reyna notified Plata Latina of the exercise of the option to purchase the property for a payment of $500,000 and the granting of a 3% net smelter return royalty.

Reyna will make advance royalty payments of $100,000 each year until either the maximum has been paid or commercial production starts from the property.