Magellan Gold has completed the purchase of the SDA Mill, Nayarit State, Mexico, from Rose Petroleum plc for $1 million in cash and $500,000 in Magellan stock, of which $100,000 in cash was paid in June. In August, Magellan arranged $900,000 in bridge loans in support of the purchase.
“Acquisition of the SDA Mill will transform Magellan into a production company,” said Pierce Carson, CEO, Magellan Gold. “In November, we began limited processing operations under an interim toll agreement to process third-party ore. We intend to continue our strategy of resuming processing operations, building production and increasing cash flow.”
“Now that we own the mill, we are focused on acquiring nearby sources of high-grade gold and silver ore that can be trucked to the mill for processing,” Carson said. “We have identified and are evaluating several attractive properties for potential acquisition.”
The SDA Mill is a fully operational flotation plant that also includes a precious metals leach circuit and associated assets, licenses and agreements. The mill has the capacity to process ore at a rate of up to 200 tons per day. The mill has a 10-year operating history. Historically, its operation has been based on sales of flotation concentrates to smelters, and payment for precious metals content. Until November when the company began limited operations, milling activity was on hold pending the completion of the purchase transaction.