Gold Resource (NYSE MKT:GORO) is acquiring an approximate 18% stake in Canada-listed Canamex Resources (CVE:CSQ) (OTCQX:CNMXF), the U.S.-based gold company announced Wednesday, assuming the right to appoint one representative to Canamex’s board of directors.
Canamex is focused on advancing its Bruner gold property in Nevada, announcing earlier this month plans to raise up to $2.16 million through a private placement financing. The company late last month unveiled metallurgical test results it called “encouraging”, as they showed high gold extraction rates at both the historic and Penelas East deposit areas at the site, while column leach tests showed rapid gold extractions even from the lower grade portion of the historic resource region.
The company in December also reported results from three core holes drilled at its Penelas East discovery, saying all the holes intersected long intervals of disseminated gold. Of the highlights, 79.9 metres of 1.5 grams per tonne (g/t) gold was intersected. The Penelas East area has been the focus of exploration for Canamex over the past two years, with the target still remaining open to the north.
The Bruner project is located about 45 miles northwest of the Round Mountain mine, which has produced over 10 million ounces of gold over a 30-year period.
Gold Resource agreed to acquire 22.22 million common shares of Canamex, at a price of 9 Canadian cents per share, for a total of $2 million. Once the deal is closed, Gold Resource Corp, which produces precious metals from its operations in Oaxaca, Mexico, expects to hold 18.4% of Canamex.
As long as Gold Resource Corp mantains a 10% holding, the company will have the right to appoint one representative to Canamex’s board, with the closing of the placement subject to stock exchange approval.
Gold Resource Corp said it made the decision to acquire Canamex’s shares for investment purposes, and it plans to evaluate the investment on an ongoing basis.
Separately, the Mexico-focused gold producer also declared its monthly instituted dividend of 1 cent per share for February, payable on March 24 to shareholders of record as of March 11. Gold Resource Corp has returned more than $95 million to shareholders in monthly dividends since beginning commercial production in July 2010.
Based on its preliminary operational results, the company’s full year 2013 production came in at 84,835 gold equivalent ounces, in line with its guidance for 80,000 to 100,000 ounces. It is expecting a stronger cash position this year following the completion of its mill expansion through increased daily tonnage and lower per tonne production costs.
