Mr. Jorge Monroy reports
REYNA SILVER ACQUIRES THE LA CHINCHE PROPERTY AND
CONSOLIDATES GUIGUI LAND POSITION
Reyna Silver Corp. has entered into agreements to acquire a controlling interest in the 250-hectare La Chinche mining concession, which is contiguous to the company's Guigui property.
This substantially expands the exploration potential and simplifies targeting of Guigui.
Payments are being made to two separate groups under the following terms (details herein): an initial cash
payment of $42,000 (U.S.), 500,000 common shares of Reyna in two tranches and 11.5 million share purchase
warrants to be issued every six months in four tranches with a validity of one year each at
74 cents, 75 cents, $1 and $1.25. Expenditures of $900,000 (U.S.) over two years and a final payment of
$1-million (U.S.) will give Reyna an 80-per-cent ownership of the La Chinche mining concession.
In relation to the consideration paid, Reyna highlights that only the initial payments of $42,000 (U.S.) in cash,
250,000 shares and one million options valid for 12 months at a price of 74 cents cents per share are
obligatory. All subsequent payments are optional at the company's discretion.
"We are very pleased to acquire La Chinche and fill the property gap between Guigui and the southernmost
known mineralization in the West camp," said Jorge Ramiro Monroy, president and chief executive officer of Reyna. "We
already know that alteration and geophysical anomalies seen in Guigui continue into La Chinche, so now
we can pursue them without concern for artificial limits. We are pleased United Minerals has recognized
the value in combining assets and has structured a deal that bets on exploration success by allowing Reyna
to focus on putting funds in the ground. If, as we believe, United Minerals' drilling permits for La Chinche
are still valid, this could significantly advance when we can begin drilling."
"United Minerals is delighted to be completing this transaction with Reyna for the La Chinche property
within the fabled mining district of Santa Eulalia where we are currently mining the Potosi mine and
producing high-grade silver concentrate. We feel that combining assets and initiating integrated exploration
of this world-class system overseen by Dr. Peter Megaw gives the best opportunity to unlock significant
shareholder value," said Matt Hudson, CEO of United Minerals Pty. Ltd.
Why La Chinche?
The Santa Eulalia district is Mexico's largest carbonate replacement deposit (CRD) district, having
produced nearly 500 million ounces of silver, three million tonnes of lead and 2.2 million tonnes of zinc. Of that production,
70 per cen came from a part of the district called the West camp, but the source of
that mineralization has never been found. Reyna is following a well-established exploration model that
indicates that such source should lie to the south within its 4,554-hectare Guigui project. Field mapping
and sampling over these anomalies are already well advanced and are adding geochemical support for drilling
targets being defined in Guigui that may extend into La Chinche.
The company has sufficient financial resources to meet its obligations required under the agreements
without affecting the existing budget.
Closing of the agreements is subject to approvals of the TSX Venture Exchange.
Reyna is acquiring an interest in La Chinche from two separate groups: United Minerals and the
underlying La Chinche concession owner. The La Chinche concession owner has agreed to sell an 80-per-cent
interest upon Reyna completing the following:
- A cash payment of $42,000 (U.S.) on signing;
- Undertaking a minimum of $900,000 (U.S.) in work on the property within 24 months;
- Following the work program, preparing a National Insturment 43-101 technical report summarizing any
mineral resources on the property;
- Based on the mineral resources set out in said report, paying an additional amount to the
concession owner, calculated as a minimum of $1-million (U.S.) (for up to 1.5 million tonnes of
resource based on 12 per cent Zn equivalent cut-off) plus an additional $250,000 (U.S.) for every 500,000
tonnes of resource at comparable grade contained within the property over and above 1.5 million
The second group, United Metals, agreed to give up its earn-in option and allowed Reyna to
negotiate a new agreement with the La Chinche concession owner in exchange for an aggregate of
11.5 million share purchase warrants and 500,000 common shares of Reyna, to be distributed
- 250,000 shares and one million warrants exercisable for a period of 12 months at 74 cents per share,
to be issued upon receipt of TSX-V approval;
An additional three million warrants exercisable for a period of 12 months from the date of issue at
75 cents per share, to be issued six months from the signing the agreement;
- An additional 3.5 million warrants exercisable for a period of 12 months from the date of issue at
$1 per share, to be issued 12 months from the signing of the agreement;
- An additional four million warrants exercisable for a period of 12 months from the date of issue at
$1.25 per share, to be issued 18 months from the signing of the agreement;
- An additional 250,000 shares will be granted 24 months from the signing of the agreement.
As noted, other than the initial payments of $42,000 (U.S.), 250,000 shares and one million warrants, all
of the payments are optional to Reyna.
The technical portion of this news release was reviewed and approved by Dr. Megaw, CPG, a qualified
person as defined under NI 43-101, adviser of the company and chief exploration officer of Mag Silver
Corp., the largest shareholder of the company.
About Reyna Silver Corp.
Reyna is a silver exploration company with a portfolio of Mexican silver assets. The company was built around
the Guigui and Batopilas projects, which formed part of Mag Silver's original initial public offering portfolio. Reyna's strategy
centres on leveraging its expertise in Mexico to explore projects that have the potential for high-grade, district-scale discoveries.
We seek Safe Harbor.
© 2020 Canjex Publishing Ltd. All rights reserved.