viewMandalay Resources Corp.

Mandalay Resources may have buyer for its Chilean mine as it strikes option deal with Equus

The non-binding heads of agreement means Equus can explore at the 29,495 hectare district in Region XI, southern Chile for three years

Mining truck
Mandalay's other assets are in Sweden and Australia

Mandalay Resources Corp (TSE:MND) had news on its Chilean asset Wednesday as the firm revealed it may have found a buyer for the Cerro Bayo mine.

The company has struck a deal with Equus Mining for an option to buy the mine, which was the scene of a flood back in 2017 after which output was suspended.

The non-binding heads of agreement means Equus can explore at the 29,495-hectare district in Region XI, southern Chile for three years.

If it chooses, Equus can exercise its option to acquire all the issued share capital of subsidiary Compania Minera Cerro Bayo Ldta (CMBC), including its mining properties, resources and mine infrastructure at Cerro Bayo, as well as the 1,500 tpd (tonnes per day) processing plant, which has been on care and maintenance for the last two years.

Output suspended

Output from the mine  was suspended from June 9, 2017, when the Delia NW mine part of the site was flooded. A search for two missing miners caused by the flood was called off on June 27.

The precious metals producer declared force majeure in respect of the mine the same month.

If Equus does decide to make the acquisition, then Mandalay will receive 19% of Equus’ share capital, along with a 2.25% net smelter royalty on production once the mine has produced at least 50,000 ounces of gold equivalent, subject to a re-purchase option in favor of Equus.

In addition, Equus will assume 50% of the approved site closure costs at Cerro Bayo.

The deal is conditional on a number of factors, including definitive agreements, third-party consents, and the approval by both companies' boards.

Shares added 3.6% to $$0.14.

Contact the author at giles@proactiveinvestors.com

Follow him on Twitter@Gile74

Quick facts: Mandalay Resources Corp.

Price: 1.32 CAD

Market: TSX
Market Cap: $120.42 m

Add related topics to MyProactive

Create your account: sign up and get ahead on news and events


The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is...

In exchange for publishing services rendered by the Company on behalf of Mandalay Resources Corp. named herein, including the promotion by the Company of Mandalay Resources Corp. in any Content on the Site, the...


Mandalay Resources latest drilling shows impressive results from Youle...

Mandalay Resources (TSE: MND-OTCQB: MNDJF) President and CEO Dominic Duffy joined Steve Darling from Proactive with news the company has seen some very strong numbers from the latest drill results on the Youle Deposit at their Costerfield Project. Duffy telling Proactive the numbers returned...

on 23/10/20

2 min read