Elemental acquired a 1% NSR royalty on the Mercedes gold-silver mine in July 2018, payable from the earlier of either a 450,000 ounces of gold production hurdle or July 28, 2022. Production at Mercedes in 2019 totalled 59,901 ounces of gold and 191,306 ounces of silver.
The Mercedes mine is a 2ktpd underground operation located in the State of Sonora in northern Mexico, 250km northeast of Hermosillo and 300km south of Tucson, Arizona. The mine is operated by Equinox Gold Corp. (TSX: EQX) and consists of 39 mining concessions covering approximately 692sq km and encompassing 45km of mineralised faults.
The geology of north-central Sonora displays a complex history of tectonic and magmatic activity. Gold-silver mineralization at Mercedes is hosted within epithermal low sulphidation veins, stockworks, and breccia zones. Over 15km of veins have been identified within or marginal to andesite-filled basins which constitute the primary exploration target. Three new orebodies have been developed to increase the number of available ore sources as a precursor to increased production, and several additional exploration targets have been identified to extend the mine life.
In addition to the large Resource base available for conversion into Reserve, which will likely only be done progressively just prior to mining due to access / drilling costs, recent new discoveries of new veins and small very high grade zones (>1Oz/t) near both new and old developments provide encouragement for ongoing Reserve replacement.
For further information please visit the Equinox Gold Corp. website.