Shares for Mithril Resources Limited [ASX:MTH] gained over 42% today. The Mithril share price is up from $0.007 to $0.010, at time of writing.
Mithril is an Australian resources company exploring for zinc, nickel, copper and vanadium in the West Kimberley, Murchison and Kalgoorlie areas. Their main focus is Billy Hills Zinc Project in West Kimberley.
Why are MTH shares up?
The company announced today they will be acquiring Sun Minerals Pty Ltd. Sun Minerals is an Australian private exploration company founded in 2017.
What’s exciting about Sun Minerals is that it holds an exclusive option to earn 100% interest of the Copalquin Gold Silver project in Mexico.
Copalquin is located in the Durango State, in Western Mexico. It is set in the Sierra Madre gold and silver trend, where there are plenty of other gold and silver producing mines, as you can see in the map below:
Source: Mithril Resources
Copalquin has six mining concessions covering 7,005 hectares, with 32 historic gold and silver underground mines.
Historical drilling has shown multiple high-grade drill intercepts. These include 17.77 metres at 45.16 grams per tonne gold and 118.2 g/t silver from 30.98 metres and 7.9 metres at 6.54g/t gold and 140 g/t silver from 143.10 metres.
The condition of the deal is that Mithril will pay 6.7 million fully paid ordinary Mithril shares for the purchase. This comes up to 40% of Mithril’s expanded share capital after competition of the transaction. They will also pay Sun Minerals $150,000 to be used to spend in Copalquin and the deal gives Sun Minerals the right to nominate a candidate as director of Mithril and nominate a candidate to a lead management role.
Mithril is conducting a 4.9 million capital raising to fund exploration of existing projects and the Copalquin project.
What happens next for Mithril Resources?
The project is ready to start drilling in 2020.
Earlier drilling showed three areas with potential mineable grades. These were El Refugio, La Soledad and El Cometa. Sun Mineral plans to test these areas and also to drill 29 holes totalling 4,490 metres.
With gold prices increasing this year, it’s not surprising that we are seeing more interest in gold and gold exploration. One way to gain exposure to rising gold prices is through purchasing physical gold.