News: Silver Mines dials into world's biggest silver producing region

Silver Mines (ASX:SVL) should trade firmer after executing a Memorandum of Understanding with a Mexican mining company to farm-in and then form a joint venture over the Veta Grande silver-gold-lead-zinc project and adjacent prospects in central Mexico.

This is a significant development for SVL as it enters the most prolific silver producing region of the world and solidifies its North American strategy.

SVL has an exclusive 90 day period to complete due diligence on the project which includes an operating plant, associated mining infrastructure and extensive exploration leases in the surrounding area.

The plant has an annual throughput estimated to be 125,000 tonnes and is capable of producing base and precious metal concentrates containing silver, gold, lead and zinc.

The terms of the farm-in include SVL spending $US2 million over a three year period, with a minimum of $US250 000 in the first year.

Once SVL has met its expenditure commitment it will then form a Joint Venture with the owners on a 50/50 basis.

SVL made a strategic decision in late 2013 to target North America as a prospective, lower cost environment to expand its project portfolio.

The company is presently valued at a modest $2 million.