03:50 PM EDT, 09/03/2024 (MT Newswires) -- Butte Energy (BEN-H.V) on Tuesday said it agreed to acquire the El Quevar silver project in Argentina, through the acquisition of Silex Argentina, a subsidiary of Golden Minerals ( AUMN ) for US$3.5 million in cash.

In connection with the transaction, Butte will complete a fully subscribed concurrent financing to raise C$15 million in a placement of 100-million shares priced at $0.15 each. It is expected that Frank Giustra, an existing insider of Butte, will subscribe as the lead order.

El Quevar was under an Earn-In Agreement with Barrick Gold (ABX.TO). The agreement terminated after four years, in April, reverting El Quevar to Golden Minerals' ( AUMN ) control. Barrick invested over US$6 million, completing a five-hole, 1,300-meter drill program. This program identified a potential gold prospect within El Quevar's central Eastern land package.

The project includes 31 mining concessionst. Surface rights are controlled by the Salta Province. A 1% net smelter return royalty applies to the El Quevar II concession and a 1% net smelter royalty on half of the minerals from the Castor concession. Butte Energy can purchase half of this royalty for C$1 million during the first two years of production.

Butte shares last traded July 24, closing at $0.155 on the TSX Venture Exchange.