In April 2021, the Company executed a streaming agreement on production from the Tahuehueto silver project, located in Mexico, owned and operated by Luca Mining (TSX.V: LUCA) (formerly Altaley Mining) (“Luca”). Pursuant to the streaming agreement, the Company has the right to acquire 100% of silver production at 20% of the related off-take price in cash up to 1,250,000 ounces, and thereafter may acquire 20% of production at 20% of the related offtake price in cash. The streaming agreement terminates 10 years from the date of initial production. In consideration, the Company paid US$5,000,000 in two tranches, of which US$2,000,000 was paid in April 2021 and US$3,000,000 was paid in July 2021.

Tahuehueto is located in the mining friendly jurisdiction of Durango, Mexico. It is a typical epithermal polymetallic mineral deposit in this part of Mexico, with metals consisting of gold silver, zinc, copper and lead. Based on the PFS completed in 2022, the project has a 10.9-year life-of mine at a production rate of 1,000 tonnes per day. (Source: Tahuehueto Project – Preliminary Feasibility Study 2022).

The mine is fully permitted and has offtake agreements in place with Trafigura, and has already produced a saleable concentrate, processing over 42,000 tonnes of ore on a toll mill basis during 2018 – 2019. This confirmed the metallurgy as straight forward, with no need for fine or ultra-fine grinding, no refractory ore and the process uses standard “off the shelf” technology realizing excellent recoveries of payable metals. Luca announced that construction of the initial 500 tpd operation is anticipated to be completed in 2Q23 with expansion up to the nameplate capacity of 1,000 tpd to be completed in 4Q23