Dana Resources, a U.S. based precious metals exploration and development company, with offices in Peru, today announced signing of a Letter of Intent to acquire the Chota Silver Mine, located in Peru. Under the agreement, Dana would be granted 100% ownership of the mine for an aggregate consideration of $425,000 in cash payments, plus a commitment to upgrade the infrastructure of the mine, and a share allotment to be determined at closing. An initial payment of $25,000 upon signing of the letter secured the project for Dana.
In addition to silver, the property is currently producing gold, lead, and zinc. Average grades are about 25 ounces of silver per ton of ore, 2 grams of gold per ton, plus lead and zinc grades averaging 7% each. The company believes that it can increase ore production to 50 tons per day with a moderate investment, yielding significant cash flow at today’s metal prices, and a profit of over $300 per ton. A 50 ton production rate would generate nearly $6 million in profit the first year. Dana also plans to continue increasing production up to a maximum of 1,000 tons per day.
Dana Resources also has the opportunity to acquire neighboring land in the region, with the opportunity of toll mining. Local families run several satellite deposits in the area, but have to transport the ore several hundred kilometers for processing. Having a mill in the area would be a major benefit to local miners, and create an additional income stream for Dana.
Dana Resources has a management team that knows Peru, and has the exploration, operational, and financial expertise necessary to identify and take advantage of the unique opportunities the area represents. The company has already acquired a portfolio of gold, silver, and other mining properties in Peru’s most prolific mining regions, and is well positioned to capitalize on increasing international demand.