Magellan Gold Extends Option to Purchase Flotation Plant in
Mexico
FOR IMMEDIATE RELEASE August 1, 2017
Reno, Nevada Magellan Gold Corporation (OTCQB:
MAGE) (Magellan or the Company) is pleased to announce it has
reached agreement with Rose Petroleum plc (AIM: ROSE) (Rose) to
extend the Companys option to purchase a flotation plant and
associated assets, licenses and agreements (together, the SDA
Mill") located in the State of Nayarit, Mexico. Total consideration
for the the purchase is US$1.5 million, consisting of $1.0 million
in cash and $500,000 in Magellan stock, of which $100,000 in cash
was paid on May 31, 2017. The mill has a history of producing
precious metals dating back for ten years and its normal operation
is based on sales of flotation concentrates to smelters. The
Company paid an initial $50,000 option payment and announced a MOU
on March 6, 2017.
Under terms of the option extension, Magellan has the obligation
by August 15, 2017, to deliver executed irrevocable bridge loan
commitments representing not less than $900,000 in cash required to
fund the transaction. Also under terms of the extension, for the
months of August and September 2017, Magellan must reimburse Rose
for mill employee and maintenance costs of approximately $25,000
per month. The August reimbursement payment is due by August 4,
2017.
Upon Magellan delivering the irrovocable bridge loan commitments
by August 15, 2017, closing of the transaction still will be
subject to satisfaction of a number of conditions, the most
important of which include legal restructuring of Mexican ownership
of the SDA Mill, Roses shareholder approval if required, and
completion of the final definitive agreement. The parties are
targeting closing to occur by the end of September 2017, however
there can be no assurance that the purchase of the mill will be
completed.
Milling activity at the SDA mill currently is on hold pending
the completion of this transaction.
The Companys strategy following the acquisition will be to
resume processing operations, build production and increase cash
flow. A key objective will be to secure high-grade feed sources.
The mill lies within the rich Sierra Madre Occidental mineralized
belt, which historically has yielded millions of ounces of precious
metals and offers multiple high-grade gold and silver epithermal
vein opportunities.
About Magellan Gold Corporation
Magellan Gold Corporation (OTCQB: MAGE) is a US public
enterprise focused on the exploration and development of precious
metals. The Company has obtained an option to acquire the SDA
flotation plant in the State of Nayarit, Mexico, and controls two
precious metals exploration properties located in Arizona and in
Peru.
The 100% owned Silver District Property in southwest Arizona
comprises over 2,000 acres covering the heart of the historic
Silver District. The property contains a near-surface historical
drilled resource of 16 million ounces of silver and exhibits
exploration promise for significant expansion. The Niobamba
Silver-Gold Property in central Peru, on which the Company has the
right to earn a 50% interest, covers 9,027 acres and demonstrates
potential for a large, bulk tonnage, silver-gold deposit.
To learn more about Magellan Gold Corporation, visit www.magellangoldcorp.com.
Cautionary Statement
The United States Securities and Exchange Commission permits
mining companies, in their filings with the SEC, to disclose only
those mineral deposits that a company can legally extract or
produce. Under SEC Industry Guide 7 standards, a final or bankable
feasibility study is required to report reserves. Currently we have
not delineated reserves on any of our properties. We cannot be
certain that any deposits at our properties will ever be confirmed
or converted into SEC Industry Guide 7 compliant "reserves."
Investors are cautioned not to assume that all or any part of any
resource estimates will ever be confirmed or converted into
reserves or that they can be economically or legally extracted.
Forward Looking Statements
This release contains forward-looking statements. Such
statements are based on good faith assumptions that Magellan Gold
Corporation believes are reasonable but which are subject to a wide
range of uncertainties and business risks that could cause actual
results to differ materially from future results expressed,
projected or implied by such forward-looking statements. Factors
that could cause actual results to differ from those anticipated
are discussed in Magellan Gold Corporations periodic filings with
the Securities and Exchange Commission.
Contacts:
Magellan Gold Corporation
Pierce Carson (505) 463-9223
John Power (707) 884-3766