VANCOUVER, Jan. 21, 2013 /PRNewswire/ – First Mexican Gold Corp. (the “Company” or “FMG”) (TSX-V: FMG, Frankfurt: 21M) is pleased to announce that it has signed a non-binding letter agreement with Compañía de Minas Buenaventura S.A.A. (“BVN”) (NYSE: BVN, BVL: BVN), pursuant to the terms of which BVN has been granted the right, for a period of 60 days from the signing, to complete due diligence and the right, at BVN’s discretion, to negotiate terms and sign a definitive agreement with FMG to earn a 70% interest in the Company’s 100% owned Guadalupe project. The objective of this proposed transaction is to further develop the Guadalupe property in Mexico, to provide capital for the Company and significantly expand the exploration program. The Company retains the Panda claim block for future exploration.
The FMG claim blocks are located along a trend of producing mines in the Sierra Madre Occidental, including the Mulatos mine of Alamos Gold Inc., Dolores mine of Pan American Silver Corp and Ocampo mine of Minera Frisco, S.A.B. de C.V. The property is also contiguous to Corex Gold Corp (CGE -TSX-V) Santana Property where Corex and Vale are now drilling subsequent to the option agreement finalized in December 2012.
Provided that BVN is satisfied with the results of its due diligence, it is anticipated the definitive agreement will grant BVN an option to acquire a 70% undivided interest in the Guadalupe project by BVN making payments to FMG totaling $5,000,000 within a four year period, and BVN completing the drilling of 11,000 meters within a four year period. In addition to the minimum required meters to be drilled BVN will conduct mapping, sampling and ground geophysics as required to best access the property potential and target drill locations. The terms of the definitive agreement will be subject to the approval of the TSX Venture Exchange. In order to facilitate matters for the Company, BVN has agreed to enter into a convertible loan arrangement, pursuant to the terms of which BVN has agreed to loan the sum of $250,000 to FMG, which loan is automatically convertible into 2,777,778 common shares of FMG at the price of $0.09 per share in the event a definitive agreement is not concluded within the 60-day period. The $250,000 will be advanced by BVN to FMG within two business days of FMG obtaining TSX Venture Exchange approval to the convertible loan and will be used to fund general operations. In the event a definitive agreement is concluded within the 60-day period, the convertible loan will be terminated and credited towards the first cash payment payable to FMG.
“The Company is very pleased to have a company such as BVN as a strategic partner to further advance the Guadalupe property to its next phase of development ” said Jim Voisin, President and Chief Executive Officer of FMG. Mr. Voisin adds: “we remain committed to our shareholders to build a good resource base in what we believe to be the high potential Guadalupe property.”
Some Historical Data
Karen zone drill highlights to date: all near surface intercepts see news releases April 28, 2011, February 27, 2012 & October 15, 2012.
- DDH #1: 5.8 meters of 3.67 g/t Au, 753 g/t Ag
- DDH #2: 15.2 meters of 2.58 g/t Au, 47 g/t Ag
- DDH #3: 37.8 meters of 6.51 g/t Au, 678 g/t Ag
- RC hole #2: 2 meters of 1.48 g/t Au & 1330 g/t Ag
- RC hole #3: 18 meters of 6.52 g/t Au & 61 g/t Ag
- HDH 11-04: 15.2 meters of 1.57 g/t Au, 335 g/t Ag, 0.18% Cu plus 22.3 meters of .35 g/t Au, 200 g/t Ag, 1.21% Cu
- HDH 11-05: 33.4 meters of 4.27 g/t Au, 395 g/t Ag, 1.24% Cu
- HDH 11-06: 21.6 meters of 4.90 g/t Au, 104 g/t Ag, 0.73% Cu
- HDH 11-27: 9.7 meters of 6.22 g/t Au, 1853 g/t Ag, 12.62% Cu
- HDH 11-29: 12.2 meters of 1.86 g/t Au, 70 g/t Ag, .14% Cu
- HDH 11-30: 24.4 meters of .34 g/t Au, 25.8 g/t Ag, .42% Cu
- HDH 11-32: 7.6 meters of 3.64 g/t Au,
- HDH 11-33: 10.9 meters of 2.70 g/t Au, 152 g/t Ag, .20% Cu
Diana zone drill highlights to date: all near surface intervals, see news release March 10, 2011.
- HDH 11-09: 15.7 meters of .77 g/t Au, 105 g/t Ag (143.7 silver eq. g/t)
- HDH 11-10: 39.0 meters of .40 g/t Au, 135 g/t Ag (154.9 silver eq. g/t)
- HDH 11-11: 49.5 meters of .42 g/t Au, 86 g/t Ag (107 silver eq. g/t) including 13.3 meters of .75 g/t Au, 195 g/t Ag (232.7 silver eq. g/t)
John Archibald, PGeo, a qualified person pursuant to NI 43-101, has reviewed and approved the technical information in this press release on behalf of the company. Samples were prepared and assayed by an accredited lab, ALS Chemex, Vancouver, BC. Quality control is monitored on a continual basis and utilizes a system of standards, blanks and duplicates to ensure analytical accuracy.
The Company is an active explorer for precious metals in Mexico and holds a 100% interest in the Guadalupe property package. The Company holds extensive exploration rights in this high potential exploration area that is attracting attention from major mining companies.
BVN is Peru’s largest, publicly traded, precious metals company and a major holder of mining rights in Peru. The company has been listed on the Lima Stock Exchange (BVL:BVN) since 1971 and on the New York Stock Exchange (NYSE:BVN) since 1996. It has over 60 years of mining tradition and is engaged in the mining, processing, development and exploration of gold and silver and other metals via wholly owned mines as well as through its participation in joint exploration projects.
BVN currently operates several mines in Peru (Orcopampa, Uchucchacua, La Zanja, Tantahuatay, Mallay, Julcani/Recuperada, Breapampa, Cedimin and El Brocal) and has minority interests in several other mining companies. These include a significant ownership interest in Minera Yanacocha S.R.L (43.65%), in partnership with Newmont Mining, in Sociedad Minera Cerro Verde (19.6%) and 49% of Canteras del Hallazgo S.A, owner of the Chucapaca project, via a partnership with Goldfields.
On behalf of the Board of Directors,
Jim Voisin President & CEO First Mexican Gold Corp. 519 699 5352
We seek safe harbour.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
This news release includes certain forward-looking statements or information. All statements other than statements of historical fact included in this release, including, without limitation, statements relating to the potential mineralization and geological merits of the Guadalupe property and other future plans, objectives or expectations of the Company are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from the Company’s plans or expectations include risks relating to the actual results of current exploration activities, fluctuating gold prices, possibility of equipment breakdowns and delays, exploration cost overruns, availability of capital and financing, general economic, market or business conditions, regulatory changes, timeliness of government or regulatory approvals and other risks detailed herein and from time to time in the filings made by the Company with securities regulators. The Company expressly disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise except as otherwise required by applicable securities legislation.