AbraSilver receives C$20M investment for Diablillos project

AbraSilver Resource announced it entered into a subscription agreement for a C$20 million investment with Kinross Gold and Central Puerto, an Argentinian private sector power company, each investing C$10 million.

Kinross Gold and Central Puerto subscribed to 50 million shares for C$0.40/share, a premium of 3% on the closing price on April 19, purching around 4% of AbraSilver's shares each.

AbraSilver said it will use the funds to explore and develop its flagship Diablillos silver-gold project in the Salta Province in Argentina. Diablillos' proven and probable mineral reserve estimate consists of 42.3Mt grading 91gpt silver and 0.81gpt golf, containing approximately 124Moz silver and 1.1Moz gold.

Additionally, AbraSilver said that the three companies will form a regional partnership to jointly explore and acquire new silver, gold, and copper projects in Argentina. Upon closing, Kinross will have the right of first offer to acquire at least 50% of newly staked or acquired projects in Argentina beyond Diablillos.

"We are very excited to welcome both Kinross and Central Puerto as important strategic shareholders and partners," AbraSilver chief executive John Miniotis said. "Through this transaction, AbraSilver is well funded for a dual strategy to aggressively advance the Diablillos project towards a production decision and to accelerate our exploration efforts."

"The exploration team has successfully grown mineral resources and reserves at the Diablillos project, and we look forward to unlocking additional value at Diablillos and, potentially, other projects in Argentina," chairman Rob Bruggeman added. "We look ahead to leveraging the relationships with Kinross and Central Puerto as we continue to grow the company."

At the beginning of the year, AbraSilver entered into an option and joint venture agreement with Teck to explore and develop the La Coipita copper-gold project in west-central Argentina. Teck will acquire 80% interest in the project by funding exploration with US$20 million over five years and committed to $3 million in payments or equity placement and up to $6.3 million in optional cash payments to vendors.