Mexican Gold Acquires Tatatila Project in Veracruz

Mexican Gold Mining has announced that together with its subsidiary, Roca Verde Exploración de México, it has signed a mining concessions assignment agreement with Chesapeake Gold. Under the Assignment Agreement, Mexican Gold will acquire 100% of the title and interest in certain mineral concessions covering a total of 3,824.36ha, collectively known as the Tatatila Project in Veracruz.

The Tatatila concessions are adjacent to Mexican Gold’s Las Minas Project. Chesapeake has identified several skarn prospects on the Tatatila Project, including potential extensions of the existing Las Minas resources.

As consideration for the Tatatila Project, Mexican Gold will issue Chesapeake 4,451,361 common shares at a deemed value of approximately USD $0.038 per share, totaling roughly US$171,200. Upon issuance, these shares will represent 14.99% of Mexican Gold’s total issued and outstanding common shares. In addition, Mexican Gold will grant Chesapeake Mexico a 1.5% net smelter returns royalty. Roca Verde will have the right to repurchase 0.5% of the royalty for US$500,000 within 10 years, reducing the royalty to 1%.

The Consideration Shares will be subject to a four-month statutory hold under Canadian securities laws and additional lock-up restrictions. On the first anniversary of issuance, 25% of the shares will be released, with subsequent 25% releases every six months, such that all shares will be free from restrictions 2.5 years after issuance.

The transaction is subject to approval by the TSX Venture Exchange and standard closing conditions for this type of agreement.