Starlo Ventures Ltd. has entered into a binding letter of intent to acquire a 100% interest in the Margarita Silver Project in Chihuahua, Mexico, through a reverse takeover that will shift the company's primary listing to the TSX Venture Exchange.

The transaction involves acquiring all issued shares of a private British Columbia company, Targetco, which holds the Mexican operating entity owning the silver property. Under the terms of the agreement, Starlo will issue 40 million common shares and make a cash payment of CAD $5 million to Targetco shareholders.

To fund the transaction and advance the project, Starlo will concurrently complete a private placement of 40 million subscription receipts at CAD $0.25 per receipt, raising gross proceeds of CAD $10 million. Each subscription receipt will automatically convert into one common share and one-half of a share purchase warrant, with whole warrants exercisable at CAD $0.35 for two years.

Upon closing, Starlo will apply for the voluntary delisting of its common shares from the Canadian Securities Exchange. The resulting entity will then apply to list on the TSX Venture Exchange as a Tier 2 Mining Issuer.

The Margarita Silver Project spans 125.625 hectares across two mining concessions in the Sierra Madre Gold Belt, situated southwest of Chihuahua state capital and northwest of an established regional producer. The property contains five quartz-barite-calcite low-sulfidation vein and breccia zones, with historical drilling primarily focused on the Margarita vein over a 1,500-metre strike length.

As part of its post-closing technical work, Starlo will engage Micon International Limited to prepare an independent technical report for the project. In addition to the initial consideration, the company has agreed to pay a further cash milestone of CAD $5 million if the resulting issuer produces a technical report demonstrating at least 20 million ounces of silver equivalent in inferred and measured or indicated resources.

Following its initial Canadian Securities Exchange listing in March 2023, Starlo previously focused its precious metals exploration activities on the Mount Richards Project on Vancouver Island, British Columbia.

Completion of the acquisition remains subject to customary conditions, including finalizing transaction documentation, completing the concurrent financing, and securing all required corporate and regulatory clearances, including approval from the TSX Venture Exchange.

Read the full announcement: Starlo to Acquire Margarita Silver Project, Mexico