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Azure Minerals has struck a binding, conditional sale agreements to sell its Mexican precious and base metals projects to mineral resources developer Bendito Resources Inc for A$20-million in cash and shares.

Bendito intends to list on the TSX within 18 months of completing the transaction, with Azure’s Alacrán, Oposura and Promontorio projects forming the core assets of Bendito.

Under the terms of the agreement, Azure would receive an immediate A$6-million cash payment, and a 10% equity interest in Bendito nominally valued at A$2-million. A second tranche of A$4-million in cash and A$8-million in shares is payable within 18 months of completion of the Transaction.

It is anticipated that the issues of shares by Bendito to Azure will result in Azure owning a maximum of approximately 15% of the issued capital of Bendito post the Bendito losting.

“This is a great outcome for Azure and our shareholders. We have realised a significant cash return for the assets while retaining exposure to the upside as the projects are further developed,” Azure MD Tony Rovira said.

“We still see potential in these high-quality, advanced-stage projects and it makes sense for them to sit within a dedicated special purpose group focused solely on Mexico, which can take them through development funded by the North American capital markets.”

Alacrán hosts the high-grade Mesa de Plata silver deposit and adjacent Loma Bonita gold-silver deposit which together contain 32-million ounces of silver and 150 000 oz of gold. Alacrán is also host to the Cerro Alacrán copper porphyry, Palo Seco silver-zinc and San Simon gold-silver prospects, where drilling has demonstrated significant exploration upside for additional precious and base metal deposits.

Azure completed a scoping study on Oposura in 2018 which showed that the project could produce 19 000 t/y of zinc, 10 000 t/y of lead and 145 000 oz/y of silver, over an initial mine life of 5.3 years. The project holds significant exploration upside for resource expansion.

“The team behind Bendito have a successful track record of identifying, acquiring, developing and operating projects, so retaining exposure to these assets that we know so well should be both exciting and rewarding for Azure shareholders,” said Rovira.

“With these extra funds, we will accelerate activities on our Andover nickel/copper project in Western Australia which is proving to be a company-maker for Azure as we progress along the dual pathways of growing the mineral resources and advancing the development studies.”

Bendito is planning to advance both the Alacrán and Oposura projects through intensive drilling, ahead of its intention to list on the TSX within 18 months of completion of the transaction.

At Oposura, resource expansion drilling will be undertaken in conjunction with further geotechnical and metallurgical testwork with a view to delivering an updated preliminary economic assessment (PEA) in approximately 18 months.

At Alacrán, Bendito is planning to undertake resource expansion drilling to substantially increase the inferred and indicated mineral resources and define a single larger resource base inclusive of Loma Bonita, Mesa de Plata and San Simon which will provide the basis to undertake a PEA.