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Highlights:
- Nativo Resources signs a binding term sheet to acquire Morrocota Gold Mine in Peru.
- The mine, located 3km from Nativo’s Bonanza Gold Mine, is targeting mesothermal quartz veins.
- Acquisition consideration of £124,557 to be settled through the issuance of new ordinary shares.
Nativo Resources plc (LON:NTVO), a company focused on precious metals mining and production in Peru, is excited to announce the signing of a binding term sheet to acquire the Morrocota Gold Mine (Morrocota), situated in the Arequipa province, 140km from the Bonanza Gold Mine ("Bonanza"). The Bonanza mine is owned by Nativo’s 50%-owned joint venture, Boku Resources SAC ("Boku"). The acquisition of Morrocota will further strengthen Nativo's presence in the region and provide significant growth opportunities.
Morrocota, which shares a central camp and infrastructure with Bonanza, is currently in the preparation phase. Vertical development in the main shaft has reached 38 meters, and horizontal development has extended 48 meters across three galleries. The mine is targeting the same mesothermal quartz vein systems that are being exploited at Bonanza, making it a promising addition to Nativo's portfolio. The company expects Morrocota to be brought into production within approximately three months, boosting its production capabilities in the region.
During the preparation stage, sampling of vein material has already returned impressive grades, with the best-developed ore chutes showing gold grades of up to 23.4g/t Au. In addition to the high-grade material, Morrocota has a stockpile of 7-9 tons of vein material at the surface, which will be transferred to Nativo as part of the acquisition.
Since the past five months, Morrocota has been operated by Boku under a contract with its current owners, Peruvian nationals Mr. Emilio Jimenez Velarde and Mr. Ignacio Jimenez Velarde. As per the terms of the acquisition, Boku will continue managing the operations and prepare an accelerated exploitation plan aimed at optimizing production.
Upon completion of the acquisition, Nativo will own 100% of the Morrocota mine through a wholly-owned Peruvian subsidiary. The acquisition is subject to the satisfaction of customary Peruvian small mining sector regulatory requirements, which are expected to take several months. Notably, any vein material produced between the signing of the agreement and the completion of the transaction will belong to Nativo, offering an immediate production benefit.
The acquisition consideration is approximately £124,557, to be paid through the issuance of 4,332,402,186 new ordinary shares in Nativo at a price of 0.00288p per share. This price represents a 15% premium over the closing share price on December 5, 2024. The Consideration Shares will be held in escrow until the acquisition is completed, with the possibility of returning the shares to treasury if the transaction does not complete.
Additionally, the Vendors will be issued one warrant for every two Consideration Shares issued. These warrants will be exercisable for up to two years, with an exercise price of 0.00359p, reflecting a 25% premium to the Issue Price. The Vendors will also make an immediate cash subscription for 347,826,086 new ordinary shares in Nativo at the same issue price, increasing their ownership in the company to approximately 7.05% once the shares are issued.
The latest financial accounts for the company holding the Morrocota exploitation contract show a loss before tax of $123,460 for the period between June and November 2024. However, the total investment to bring the mine to its current position is approximately $185,000, highlighting the development potential of Morrocota.
