Outcrop Silver & Gold Corp Partners with Silver Mines to Boost Kramer Hills Gold Project
- Outcrop Silver & Gold Corp partners with Silver Mines Limited to enhance the Kramer Hills gold property in California.
- Silver Mines will invest approximately US$6 million and can earn up to an 80% interest in Kramer Hills.
- The partnership allows Outcrop Silver to focus on its Santa Ana silver project while unlocking value from non-core assets.
Outcrop Silver & Gold Corp Forms Strategic Partnership to Enhance Kramer Hills Gold Property
Outcrop Silver & Gold Corporation (TSXV: OCG) embarks on a significant partnership with Silver Mines Limited (ASX: SVL) concerning its Kramer Hills gold property in San Bernardino, California. This collaboration presents a strategic opportunity for Silver Mines to earn up to an 80% interest in the Kramer Hills project, a move that is poised to enhance the development of this promising gold asset. The partnership involves an investment of approximately US$6 million (around C$8.2 million) from Silver Mines, which will be allocated through a combination of cash and shares, alongside the funding of a feasibility study for Outcrop Silver.
The Kramer Hills property encompasses 48 km² and includes 569 Bureau of Land Management (BLM) claims that are strategically located around the historic Shaherald oxide gold mine. This site is notable for its geological features, including a 7-kilometer fault zone that contains both historic shafts and an open pit. The initial transaction sees Silver Mines committing US$500,000 in cash and issuing 23.5 million shares at A$0.13 each, with the shares subject to a 12-month escrow period. The agreement outlines a clear pathway for Silver Mines to earn a 50% stake by funding US$3.5 million in exploration within a two-year timeframe, with an additional US$2 million in shares required to secure the remaining interest.
This partnership allows Outcrop Silver to concentrate on its flagship Santa Ana silver project while simultaneously unlocking value from its non-core assets, such as Kramer Hills. Upon completion of the feasibility study, Outcrop Silver holds the option to either enter a joint venture with Silver Mines or convert its remaining 20% stake into a 2% net smelter return royalty. This strategic alignment not only enhances the viability of the Kramer Hills project but also provides Outcrop Silver with the necessary resources and focus to advance its primary exploration interests.
In addition to the Kramer Hills development, Outcrop Silver's recent amalgamation with Zacapa Resources Ltd. expands its portfolio, which also includes the Pearl porphyry project. This acquisition further solidifies the company's position in the mining sector, providing a diversified asset base that can attract investment and facilitate continued growth.
Overall, the partnership with Silver Mines marks a pivotal moment for Outcrop Silver & Gold Corp., as it seeks to leverage its non-core assets while focusing on its primary silver project, ultimately aiming to enhance its operational efficiency and market presence in the mining industry.