
The Picacho group of concessions consists of 7,060 hectares and is located in Sonora, Mexico. Work to date on Picacho has identified nine gold-bearing veins over four mineralized target areas with an aggregate strike length of over 10.8 km.
Yamana has paid Adit $7.5 million upon closing, and, upon exercising the option to complete the acquisition, will pay (i) $9.8 million on or before the 12 month anniversary; (ii) an additional $1 million for every 100,000 ounces defined by the 60 month anniversary; and (iii) a final installment payment of $4.3 million on the sixth year anniversary. The payments for the measured, indicated, and inferred ounces defined will be capped at $14 million. If no gold is defined on the property by the 36 month anniversary, Yamana will make an advance payment of $3 million.
Following this sale, Tara Minerals has set fourth main five priorities to complete. These include:
1st Priority - Strengthen balance sheet
1. Pay off all short-term debts & stay debt free
2. Make last payment on iron ore property. Own 100%
3. Now has cash to start and maintain production
4. Monthly cash burn $200K. Low overhead
2nd Priority - Start iron ore project
1. Demonstrate ability to start and maintain production
2. Show consistent sales, cash flow, earnings
3. Build cash hoard/liquidity to further strengthen balance sheet.
3rd priority - start publishing 43101 geological studies to define resource. Gold, silver, copper, lead, zinc, iron ore
4th priority - Start Dom Ramon production. Gold, silver, lead, zinc.
5th priority - What to do with cash flow?
1. Continue to add value via buying mining rights in Mexico.
2. Start buying back stock
3. Start paying a dividend
4. Stay debt free
Robert Wheatley, President of Adit, commented, "This agreement is beneficial to both parties. It a) provides Adit with a debt-free platform for future exploration and property acquisitions and provides its parent Tara, with funds to immediately advance production focused projects; and b) gives Yamana a strategic asset to grow its Mexican resources."
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