Victory Mines to acquire Bolivian-focused tin company

THE BOURSE WHISPERER: Victory Mines (ASX: VIC) has entered into an agreement with unlisted Australian public company South American Tin Limited (SAT).

SAT owns 80 per cent of a local Bolivian entity that holds contracts over seven large-scale tin hard rock, tailings and alluvial tin projects located in the North of Potosi region of Bolivia.

 

Specific projects contracted to SAT. Source: Company announcement

 

Historically Bolivia has been one of the world’s main tin producing countries and is currently the world’s No 4 tin producer.

SAT has tenure over a portfolio of tin projects including:

1.    A near-term development project through small-scale mining and processing operations working with the Juan del Valle Mining Cooperative at its tin/zinc/silver hard rock underground mine. It has been identified as SAT’s first project and has considerable local community support;

2.    Development of the world’s largest tin tailings processing operation from three tailings dumps. One project is already contracted to SAT, El Kenko, again with a local Mining Cooperative. This project has a small inferred tin resource estimated in 2005 that is compliant with the Canadian NI43-101 reporting requirements. SAT’s work, which includes some drilling, is aiming to upgrade this resource so that it is compliant with the 2013 JORC Code;

3.    The opportunity to redevelop what was one of the world’s largest hard rock tin deposits, the Siglo XX Mine, (‘Siglo XX’ means the ‘Twentieth Century’ in Spanish). Contracts have been signed with the Dolores, Siglo XX and XX de Octubre Mining Cooperatives that have exclusive contractual rights to the old mine from COMIBOL, Bolivia’s State mining company; and

4.    Multiple additional alluvial (Rio Andavillque and Rio Centenario) and hard rock (Pucro) projects that have small-scale and large-scale development potential.

“The Board has reviewed a number of opportunities to expand Victory’s portfolio beyond Western Australia and we have concluded that the opportunity presented by SAT was the most compelling and represents a far superior opportunity for our shareholders,” Victory Mines non-executive chairman Dr James Ellingford said in the company’s announcement to the Australian Securities Exchange.

“In the current investment climate for the junior resources sector, we are attracted to SAT’s strategy of developing small-scale ore processing operations, which if successful, can generate cash flows which will underpin the company’s future growth and give SAT the flexibility to re-develop tin projects that may rank among the largest in the world.

“The Board is also encouraged by SAT’s local community and government links and social expertise which we recognise are essential to operating successfully in Bolivia.

“The fact that the company is led by an experienced Australian mining engineer who has been working in Bolivia for eight years, and is supported by an experienced local team, gives us further confidence.”

Website: www.victorymines.com