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Avino Silver & Gold Mines Ltd. (TSXV:ASM), via its wholly-owned Mexican subsidiary, entered into a new agreement with Minerales de Avino, S.A. de C.V. whereby Minerales has indirectly granted to the Company the exclusive right to explore and mine the La Platosa property known as the “ET zone”.
As quoted in the press release:
Pursuant to the Agreement, the Company will have the exclusive right to explore and mine the property for an initial period of 15 years, with the option to extend the agreement for another 5 years. In consideration of the grant of these rights, the Company must pay to Minerales the sum of US$250,000, by the issuance of 135,189 common shares of the Company. The Company will have a period of 24 months (the “Development Period”) for the development of mining facilities.
The Company has agreed to pay to Minerales a royalty equal to 3.5% of net smelter returns (the “NSR Royalty”), at the commencement of commercial production from the property. In addition, after the Development Period, if the minimum monthly processing rate of the mine facilities is less than 15,000 tonnes, then the Company must pay to Minerales in any event a minimum royalty equal to the applicable NSR Royalty based on processing at a minimum monthly rate of 15,000 tonnes.
Minerales has also granted to the Company the exclusive right to purchase a 100% interest in the property at any time during the term of the agreement (or any renewal thereof), upon payment of US$8 million within 15 days of the Company’s notice of election to acquire the property. The purchase would be completed under a separate purchase agreement for the legal transfer of the property.
Avino CEO, David Wolfin, said:
“I am very pleased to say that with this key agreement in place we can now proceed with our plan to become a significant silver producer. This new long-term agreement marks a significant milestone for the company; Avino can now proceed with its major expansion plans. We have commenced work on an application that will allow us to de-water the existing Avino mine workings. To accommodate the new ore, we are implementing a plan to make the necessary minor modifications to our existing mill in order to bring the plant back to its full capacity of 1250tpd. Drilling has commenced to define mineralized zones (four thousand metres through 10 holes are planned for 2012.) A new 43-101 resource estimate will be forthcoming once the infill drilling program is complete.”
Click here to read the Avino Silver & Gold Mines Ltd (TSXV:ASM) press release
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