Consil Cuts Deal To Get Silver Mine Idaho Company Will Merge With Mexican-Based Firm

ConSil Corp. will merge with a Mexican mining company and, in the process, acquire a promising silver mine that will become the young company’s biggest asset, according to ConSil’s chairman.

The deal requires shareholder approval, but the plan is for ConSil to give 9 million of its shares to Minas La Colorada for its mine in Zacatecas, Mexico. The deal should happen by late October.

The mine produces 600,000 ounces of silver annually, and needs capital to deepen its shaft and expand its mill facilities, said ConSil Chairman Ralph Noyes.

“We’ve known the people at Minas La Colorada for quite some time,” he said. “They knew we were looking for a silver property.”

As part of the proposed merger, Ramon Davila, currently president of Minas La Colorada, will become chief executive officer and chairman of the board of ConSil. Noyes will become ConSil’s president, and where he will be based will be decided in the future, he said.

ConSil was revived from a dormant status by Noyes after he left Hecla Mining Co., which will remain a large shareholder if the deal is approved. ConSil owned properties in the Silver Valley before selling them to get cash for exploration efforts in Mexico.

ConSil owns other exploration properties in Mexico and recently became listed on the Vancouver Stock Exchange.

The Minas La Colorada mine in the Chalchihuites mining district would receive about $3 million to complete the expansion, Noyes said. If all goes well with the proposed merger, the improvements could start in the last quarter of this year, he said.

The mine produces its silver at a cost of about $2.50 an ounce, and under the expansion could produce as many as 2 million ounces of silver a year. The mine has several attractive exploration areas, and ConSil, under the proposal, would spend $1 million for a feasibility study there.

“It’s an under-explored district,” Noyes said.

, DataTimes