The Nicaragua-focused gold producer Mako Mining Corp. (TSX-V: MKO) will be expanding its portfolio downward into South America this year.
Mako announced Tuesday that it has signed an agreement to acquire Goldsource Mines Inc. (TSX-V: GXS). Through acquiring the Guyana gold operator, Mako will receive its flagship Eagle Mountain project.
Based on a 2022 estimate, that operation is valued at about US$292 million, is estimated to yield a 57 per cent internal rate of return and will have a 15-year lifespan. Mako claims that the geological similarities between its San Albino mine in Nicaragua and the Guyana project will enable streamlined development and gold extraction.
Mako’s chief executive Akiba Leisman stated that combining the companies will create an operator with far greater capabilities than what each could bring to the table individually. “The scalability of Goldsource’s Eagle Mountain is a direct analogue to that of Mako’s San Albino mine,” he said.
Per estimates, Eagle Mountain holds just over 1.8 million ounces of indicated gold. Nearly 26,000 metres of drilling were completed at the site in 2021 before the last mineral resource estimate the following year.
Once the transaction concludes, Mako shareholders will own 84 per cent of the combined company while Goldsource shareholders retain a 16 per cent stake.
“The significant broadening of technical bandwidth, including Mako’s mine development and construction expertise, is expected to expedite the timeline for establishing the Eagle Mountain Project as a near-term, low capital intensity development opportunity,” Goldsource CEO Steve Parsons said.
So welcome aboard, shareholders old and new.
It’s time to enjoy the ride. pic.twitter.com/2r1ZbQRvjI
— Akiba Leisman (@AkibaLeisman) March 26, 2024
Read more: BMO underwriters agree to invest C$100M in Calibre Mining
Read more: Calibre Mining added to VanEck Gold ETF
Mako has significant success in Central America
The company reported a series of impressive drill results from an area near its flagship Nicaragua mine in late January. They included 51.8 g/t gold throughout a 3.9-metre intercept and 25.75 g/t Au over 2 metres.
Mako also reported a 134 per cent sequential rise in gold sales for Q4 last year. The gold producer generated 13,481 ounces throughout the quarter.
Nicaragua is Central America’s number one gold-producing nation. More broadly, mining exports are the country’s top source of revenue.
Other companies currently capitalizing on the country’s resources include Mineros S.A. (TSX: MSA), Condor Gold (TSX: COG) and Calibre Mining (TSX: CXB) (OTCQX: CXBMF).
Over 25 mining companies from Canada, the United States and Australia are currently active in Guyana. In 2022, the nation produced over 486,000 ounces of gold.
Drilling underway at Eagle Mountain. Photo credit: Goldsource Mines
Calibre Mining is a sponsor of Mugglehead news coverage
rowan@mugglehead.com
