E2 Metals owns one of largest undeveloped silver-gold resources in Santa Cruz with Pinguino acquisition

E2 Metals (ASX: E2M) is officially the owner of one the largest undeveloped silver and gold resources in Argentina’s Santa Cruz province after completing its acquisition of the Pinguino project from Austral Gold (ASX: AGD).

The company first announced it was acquiring Pinguino in November last year under a share sale agreement with Austral, and that process is now complete.

As part of the transaction, E2 Metals was required to pay US$2 million (A$2.96 million) up front to Austral, plus a further US$2.5 million (A$3.7 million) in deferred payments.

Additionally, E2 Metals issued about 49.7 million shares, and 15 million options.

Following completion of the transaction, Austral is now E2 Metals’ largest shareholder with a 19.9% holding.

The US$2.5 million up-front payment was funded from existing cash reserves.

E2 Metals managing director Todd Williams said the company is “thrilled” to complete the “transformative” acquisition of Pinguino.

“The company now holds the largest undeveloped silver resource in Santa Cruz, has new and evolving high-grade discoveries and a commanding landholding in the prolific Cerro Vanguardia district.”

Pinguino silver-gold project

Covering almost 100sq km, Pinguino is located 15km north of E2 Metals’ existing Conserrat silver and gold asset project in Argentina.

The project is also only 35km from AngloGold Ashanti’s (ASX: AGG) Cerro Vanguardia mine and is the second largest known vein field in Santa Cruz.

It has 115km of cumulative strike of underexplored epithermal veins and an existing foreign resource comprising 82 million ounces of silver equivalent.

Of that resource, 51Moz is classified as indicated with a grade of 90 grams per tonne silver equivalent (32Moz silver and 219,000oz gold).

E2 Metals has undertaken “substantial due diligence” across Pinguino and has defined 19 exploration targets.

With the acquisition now complete, E2 Metals will update the foreign resource to comply with the JORC code.

Advancing Conserrat

While eager to get on the ground at Pinguino, E2 Metals is advancing its Conserrat project in the region.

Mr Williams said the company will be releasing a maiden resource for Conserrat in the current quarter.

“The company remains in a strong financial position and looks forward to pursuing further growth through resource expansion, new vein discoveries and further potential regional consolidation,” he added.

Drilling is also planned to begin across Pinguino and Conserrat with the aim of making more discoveries and building resources.

Rio Negro projects

In addition to Pinguino and Conserrat, E2 Metals is actively exploring its projects in Argentina’s Rio Negro province – Vista Alegre, Ofelia, El Rosillo and Paredes.

Last year, E2 Metals completed a 15-hole diamond drilling program for 1,380m at El Rosillo. The scout drilling program aimed to test the extent of high-grade mineralisation identified during trenching and surface sampling.

Drilling returned anomalous levels of silver and gold. Three target areas at El Rosillo have been prioritised for further exploration.

Over at Parades, surface exploration was completed in the December quarter and confirmed the presence of a previously unknown copper-gold mineralised centre, with peak grades of 25% copper, 2.7g/t gold and 148g/t silver.

Cobar projects

While focused on Argentina, E2 Metals also has a 175sq km strategic landholding in New South Wales’ Cobar Superbasin.

The Cobar project is close to other known projects in the region including Peel Mining’s (ASX: PEX) Wagga Tank and Mallee Bull assets.