Luca Mining has entered into a definitive agreement to acquire the El Barqueño gold silver and copper project in Mexico from industry giant Agnico Eagle Mines. The deal involves a massive 32,000 hectare property situated in the state of Jalisco, about 100 kilometers west of Guadalajara. To secure the asset, Luca will provide an initial ten million dollars in stock, with the potential for total payments to reach sixty million dollars through various performance milestones.
The financial structure of the buyout is designed around progress at the site. Beyond the initial equity payment, Luca will owe fifteen million dollars once it begins its first drilling program and another fifteen million when commercial production starts. Additionally, twenty million dollars in further payments will be triggered based on gold equivalent production levels, specifically five million dollars for every 100,000 ounces produced up to a cap of 400,000 ounces. Luca retains the flexibility to make these future payments using cash, stock, or a mix of both.
Dan Barnholden, CEO and Director of Luca Mining, described the move as a highly strategic and accretive addition to their existing portfolio of Mexican mining assets. While there is excitement surrounding the high grade potential of the project, some complexities remain. A legal process known as an amparo proceeding is currently ongoing in a Jalisco court regarding concessions granted before certain regulations were created. Furthermore, while historical estimates suggest significant reserves of gold equivalent ounces, those figures have not yet been updated to meet current official reporting standards by a qualified person.
For Agnico Eagle, this sale follows years of exploration efforts including roughly 225,000 meters of drilling conducted between 2015 and 2018 after they originally acquired Cayden Resources and Soltoro Ltd. This divestment comes as Agnico shifts focus toward other interests, such as its recent multi million dollar commitment to Radisson Mining Resources in Quebecs Abitibi region. Following the announcement of the acquisition, market activity showed Luca Mining shares trading near one dollar and nine cents while Agnico remained steady above two hundred eighty dollars.
