Cerrado Gold has acquired all of the shares of Minera Triton Argentina, owner of the past producing Manantial Espejo gold and silver mine in Santa Cruz province, Argentina, from Pan American Silver and its subsidiary Aquiline Resources, under a share purchase agreement dated November 13. Total consideration is 20 million US dollars in cash: 10 million paid at closing and two deferred payments of 5 million each on the first and second anniversaries of closing. Minera Triton has also granted Pan American a 1.0 percent net smelter returns royalty on future production, in settlement of existing indebtedness, secured by a mortgage over the mining concessions and a parent guarantee from Cerrado.
The acquisition was completed on an as is, where is basis. Cerrado assumes all historical, current and future liabilities of Minera Triton, including closure obligations backed by a financial closure guarantee of approximately 13.8 million dollars required under Santa Cruz provincial law, which the company will satisfy through a letter of credit. Cerrado’s operating subsidiary Minera Don Nicolas, which runs its existing mine in the same province, will provide all funding for the acquisition and start up, and the company said the Government of Santa Cruz has supported the acquisition and a potential return to operations.
Manantial Espejo was built in 2006, began operating in 2008, and was closed in early 2023 after mining concluded at the end of 2022, since when it has been on care and maintenance. It produced about 1.4 million gold equivalent ounces over its life, including 110,000 to 137,500 ounces a year between 2009 and 2016 and 68,000 ounces in its final year, 2022, with mineralized material left in place at closure. The site has two historical open pits, underground workings accessed from three portals, and a mill capable of up to 2,500 tonnes per day, which Cerrado’s due diligence found to be in good condition. The property covers about 45,255 hectares across 25 mining properties.
Cerrado’s phased redevelopment plan for 2027 starts with dewatering the underground mine and refurbishing infrastructure, expected to take up to six months, then commissioning the mill at about 1,000 tonnes per day, the rate the operation ran at before shutdown, initially processing low grade stockpiles and then blending in new underground material. A roughly 40,000 metre drill program in 2027 is aimed at producing a first NI 43-101 resource estimate.
The risk sits in what the release states plainly: no mineral resource or reserve has been estimated for the property under NI 43-101, no economic study has been prepared, and any decision to resume mining will not be based on a feasibility study. The exploration target Cerrado cites, 1.3 to 1.8 million tonnes at 1.5 to 2.8 grams of gold per tonne left unmined at closure, is conceptual. The 20 million dollar price buys processing capacity and optionality, not a defined orebody.