Mexican Firm Scrubs Consil Deal Company Cites Metal Prices, Possible Lawsuit For Decision
Low metal prices and a possibility of becoming part of the Environmental Protection Agency’s lawsuit against Coeur d’Alene Basin mining companies, has caused a Mexican mining company to cancel an agreement that would have given ConSil Corp. one of its biggest assets.
Mexican mining company Minas la Colorada has called off exclusive talks to sell all of its assets to ConSil, of Hayden, Idaho.
The purchase would have given ConSil ownership of a mine in Zacatecas, Mexico that produces 600,000 ounces of silver a year. Presently, ConSil is an exploration company and does not own land producing silver.
However, ConSil still plans to proceed with trying to get financing for purchasing the mine, company Chairman Ralph Noyes said.
“Our current plan is to go forward,” Noyes said. The company will know in a few months whether it has enough financing, he said.
On Thursday EPA officials announced they would drop 52 companies from possibly being named in the billion-dollar federal lawsuit for cleanup of the Coeur d’Alene Basin. ConSil has not heard if it will be named.
The agreement had been exclusive between the two companies, but now Minas la Colorada plans to talk with other mining companies in Mexico. However, it still has encouraged ConSil to continue its financing plans, Noyes said.
Earlier this month, both companies put the agreement on hold as silver prices continued to fall and ConSil was having difficulty finding investors in the wake of this spring’s Bre-X disaster.
Silver prices have hovered around $4.50 an ounce, the closing price Thursday in New York. Presently the Mexican mine produces silver at $4.00 an ounce. If ConSil acquires the mine, it plans to bring costs down to $2.50 an ounce by investing $3 million to expand operations and increase production to 2 million ounces of silver a year.
Noyes revived the small mining company last January after leaving Hecla Mining Co., which owns more than half of ConSil’s shares. ConSil sold properties it owned in the Silver Valley to raise cash for the Mexican exploration.
ConSil has options to purchase other exploration properties in Mexico and also is continuing to look for other silver properties in the United States and Mexico, Noyes said.
, DataTimes