In a news release, President and CEO Arturo Bonillas of Magna Gold Corp. (MGR:TSX.V; MGLQF:OTCQB) issued a letter to the company's shareholders summarizing the firm's operational and financial activities in 2020 and its plans for 2021.
CEO Bonillas led off by commenting that in 2020, Magna succeeded in growing the company through strategic acquisitions and targeted exploration as part of its plans to evolve from a junior explorer into an intermediate Mexico-focused gold producer.
The firm stated it remained true to its commitment to environmentally sustainable growth and safe operating practices at all of its sites and offices, and that it is committed to transparency and implementing systems to minimize risk and economic, social and environmental impact in Mexico. The company noted that in 2020, it carried out more than two million man-hours of operations at the San Francisco Mine in Sonora, Mexico, without incurring any disabling incidents or workplace accidents.
Bonillas noted that in May 2020, Magna acquired the past producing San Francisco Mine where it has re-invigorated the operation transforming it into a mine capable of producing 66.25 Koz Au per year. Since the firm acquired the mine, it has sold 20,235 ounces of gold that generated US$37 million in revenue.
The letter indicated that the company closed a private placement in May 2020 that resulted in total gross proceeds of $7 million. The firm noted that lead investors included Eric Sprott and two other mining participants.
In 2020, Magna commenced several exploration programs targeting new gold and silver projects. These projects included the Mercedes project and the La Pima Silver Project, both located in Sonora, Mexico.
Bonillas advised that the "acquisition of the San Francisco Mine was coupled with the acquisition of several attractive precious metal exploration projects that we believe have the potential to host significant mineral resources and aid in the Company’s long-term growth and value generation." These include an exploration and purchase option for a 100% undivided interest of two mining claims that make up the San Judas Project located in Sonora, Mexico.
The company also stated that it acquired a 100% undivided interest in two mining concessions comprising the Margarita Silver project in Chihuahua, Mexico. Channel sampling work at Margarita returned values of 100-900 g/t silver. Although drilling has only been carried out along 1,700 meters of one vein at Margarita so far, a total of 35 diamond drilling holes have been completed there that returned some intercepts measuring over 1,000 g/t silver equivalent.
The company noted that it expects that the market for precious metals will continue to gain momentum over the next several years and that it will stay focused on rapid, sustained growth to increase its market value.
The firm stated it has "several remarkable and compelling catalysts for continued growth that we believe positions Magna favorably to take advantage of a stronger precious metals environment. Magna has over 45,000 hectares of highly prospective ground, a gold operation with increasing resources, two very promising gold projects, and a portfolio of four silver properties including La Pima and Margarita—all in two of the most mining-friendly states in Mexico."
Bonillas advised that the company is now engaged in building out its management team further in order to strengthen the organization with seasoned and experienced leaders. The firm will be looking to fill key positions at the company in 2021 including a chief financial officer, a market development and investor relationships V.P. and an independent chairman of the board.
Magna Gold noted that the San Francisco gold mine, its primary producing asset, is composed of two previously mined open pits (San Francisco and La Chicharra), heap leach processing facilities and associated infrastructure. The company advised that surface operations at San Francisco were restarted in Q3/20 and are expected to reach full production levels in 2021. Magna reported that it is also presently developing underground operations at the San Francisco Mine.
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