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Hochschild Mining (OTCQX:HCHDF) (OTCPK:HCHDY) said Tuesday that its Brazilian subsidiary has entered into agreements granting it the option to buy Cerrado Gold’s (OTCQX:CRDOF) Monte Do Carmo project for $60 million.
Hochschild (OTCQX:HCHDF) (OTCPK:HCHDY) said its subsidiary Amarillo Mineracao do Brazil has advanced $15 million via a 10% interest-bearing secured loan as part of the agreement for the Monte Do Carmo project and has committed to spending at least $5 million on exploration activities on the project over the 12.5-month period ending in March 2025.
The company may also choose to exercise the option to purchase a 100% interest in the project during that period by presumptively repaying the loan and making a $45 million cash payment to Cerrado (OTCQX:CRDOF) in installments over the next three years.
Hochschild (OTCQX:HCHDF) (OTCPK:HCHDY) said the project has 21 mining leases across 82,542 hectares and hosts several identified gold targets along a 30km mineralized trend.
Cerrado (OTCQX:CRDOF) has established a proven mineral reserve of approximately 1 million ounces of gold, has completed a feasibility study and is in the final stages of approval, but has been unable to raise the funds needed to achieve a final investment decision for construction.