The discovery of gold and other precious minerals can be a tough business that is approached in a wide array of manners. One of the proven successful tactics is to go to where proven reserves have been explored in the past, but not with modern technologies.
Colibri Resource Corporation (TSX-Venture:CBI) was formed with the explicit purpose to explore historical mining districts in Mexico. Colibri has established itself as a presence in the State of Sonora with ownership in four different claims in the historically producing area that encompasses more than 15,000 hectares.
Colibri has not limited itself to one metal producing area as its Ramard claim, which is over 8,000 hectares, contains silver, zinc and lead in a skarn as announced in a 2007 press release.
The Company’s Leon claim is nearing final feasibility stages for mine production and is focused as a large molybdenum and copper project and borders the Creston Moly Corp. (TSX-Venture:CMS) project.
Perhaps one of Colibri’s most valuable projects is its gold claim that is centered within the Sonora gold belt near the city of Caborca which has hosted dozens of artesanal mine workings over the years and is comprised of similar structure to the largest gold mines in Mexico.
Colibri announced yesterday that it had signed a letter of intent with industry giant Agnico-Eagle Mines Ltd., which trades on both the New York Stock Exchange (AEM) and the Toronto Stock Exchange (TSX:AEM) at a price in the area of $85 per share.
Agnico-Eagle, which currently operates six gold mines that will produce in excess of one million ounces of gold this year, has a strong history of developing gold mines worldwide, including Mexico. The Colibri gold claim, because of its location in a noted producing area with previous explorations producing gold has been the focus of attention of several exploration and mining companies in the recent past, but Colibri has come to terms with Agnico-Eagle to develop the project.
While the agreement is subject to all formal and standard circumstances, the terms state that upon signing of the joint venture agreement, Agnico-Eagle will purchase three million shares of Colibri at $0.15 per share with the right to purchase three million more shares in the course of the next two years at the cost of $0.25 per share.
Additionally, Agnico-Eagle must spend a minimum of $3 million during the next three years for a feasibility study and performance of mineral exploration to earn a 75% interest in the project. Agnico-Eagle must also make option payments over a seven year period that total $1.451 million to Colibri.
Perhaps equally important to the development of this gold claim is the monies that will be incoming to Colibri that will facilitate development of the Companies other projects in the region that garner significant possibilities.
In a solid uptrend now for the last three months, the price per share of Colibri surged again yesterday on the LOI news. Investors will be keen to developments of the Company from this point forward due to this new LOI with a company the magnitude of Agnico-Eagle. If Agnico-Eagle sees the possibilities, investors will quickly take notice.
