Magellan Gold Arranges 900,000 in Bridge Loans for Purchase
Option of Flotation Plant in Mexico
Reno, Nevada -- August 16, 2017 -- InvestorsHub
NewsWire -- Magellan Gold Corporation (OTCQB:
MAGE) (Magellan or the Company) is pleased to announce it has
arranged $900,000 in irrevocable bridge loans in support of its
option to purchase the SDA Mill located in the State of Nayarit,
Mexico, from Rose Petroleum plc (AIM:
ROSE) (Rose). The bridge loans are sufficient to complete the
cash component of the purchase price and have the effect of
extending the purchase option until closing of the transaction. As
announced August 1, 2017, in order to extend the option, the
Company had the obligation to secure the bridge loans on or before
August 15, 2017. 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 qlready has been
paid.
We are very pleased to have arranged the $900,000 in bridge
loans, which greatly enhances the probability of a successful
closing, stated Pierce Carson, CEO. Our strategy following closing
will be to resume processing operations, build production and
increase cash flow.
A key objective will be to secure high-grade feed sources,
Carson continued. 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.
In order to extend the purchase option, Magellan also agreed to
reimburse Rose for mill employee and maintenance costs of
approximately $25,000 per month for August and September 2017. The
August payment has been made, and the September payment is due by
September 1, 2017.
Closing of the transaction is 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, and completion of the final definitive
agreement. The parties are targeting closing to occur in October
2017, however there can be no assurance that the purchase of the
mill will be completed.
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 ten-year
operating history. Its normal operation is based on sales of
flotation concentrates to smelters, and payment for precious metals
content. Milling activity currently is on hold pending the
completion of the purchase transaction.
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