J2 Metals (JTWO.V) has secured TSX Venture Exchange approval for a definitive option agreement with Impact Silver (IPT.V) over the Sierra Plata silver-gold-antimony project in Mexico.
The project forms part of a 2,203-hectare land package that includes five past-producing silver mines, making it a compelling asset amid high silver prices, J2 said.
Under the terms, J2 has made an initial consideration of 1 million subscription receipts valued at C$250,000. The company must issue 1.5 million shares in year one, 2 million shares in year two and 3 million shares in year three.
J2 can elect to pay up to 25% of the share consideration every year in cash.
Impact will receive a 1.5% net smelter returns royalty on all minerals produced from the project, and J2 can halve the royalty for C$1.5 million.
J2 can accelerate its acquisition of Sierra Plata by completing the payments and paying an additional $500,000 to Impact.