South32 considers Mexican joint venture

South32 has secured an option to form a 70/30 joint venture with Silver Bull Resources at the Sierra Mojada zinc-silver project in Mexico.

Under the agreement, South32 must contribute a minimum $US10 million in exploration funding over a four-year period, including $US3 million, $US6 million and $US8 million, respectively, over the first three years.

South32 can exercise the option by contributing $US100 million ($131.3 million) to Silver Bull subsidiary, Minera Metalin, giving the diversified miner a 70 per cent stake in the project.

Silver Bull chief executive Tim Barry said the agreement validated the success identifying high-grade sulphide zones at the Sierra Mojada project.

“South32 is a globally diversified metals and mining company that will bring funding and significant technical expertise to the project,” Barry said.

“We believe this agreement recognises the significant potential at the Sierra Mojada project.”

If South32 decides not to continue with the project during the four-year option period the Silver Bull will retain 100 per cent ownership of the project.

To keep up to date with Australian Mining, subscribe to our free email newsletters delivered straight to your inbox. Click here.