The historic project has been on care and maintenance since October 2022 after being in production for over 15 years and producing more than 45 million ounces of silver and 650,000oz of gold.
However, Mitre is investing in projects with significant upside and already in place assets.
In-depth studies have estimated that Cerro Bayo contains an existing joint ore reserves committee-inferred resource of 3.82 million tonnes at 206 grams per tonne for 24.7Moz of silver equivalent.
The project is also considered to have significant scope for rapid growth, with extensive high-grade mineralisation identified outside the current resource.
The acquisition includes more than $150 million of infrastructure, including a 500,000t per annum processing plant, extensive underground mines, power network, offices and workshops.
Executive director Ray Shorrocks said Mitre is preparing to move quickly to progress this major acquisition which transforms it into a significant silver-gold exploration company.
“The Cerro Bayo acquisition is an exceptional company-making opportunity for Mitre because it comes with a significant resource, huge scope for rapid resource growth and the option of near-term production thanks to the existing plant and infrastructure.”
“The infrastructure alone has a replacement value of more than $150 million. And in addition to the significant resource, there is abundant known mineralisation which will help underpin rapid resource growth and immense district-scale potential.”
“We plan to capitalise on this opportunity by starting a drilling program early in the new year.”
Mitre’s immediate strategy is to define and rapidly grow the existing near mine resource base with a 6,000m drilling program expected to commence in January.
The company is focusing on extending and infilling the near mine mineralisation with the goal of releasing two resource upgrades in 2024.
Mr Shorrocks said Mitre will apply modern exploration techniques to the historic project to deliver further step change discoveries.
As part of its takeover of the operation, Mitre will also commence baseline permitting work for future operations as soon as possible.
To fund the acquisition and to allow it to accelerate its development programs, the company is undertaking a two-tranche placement to raise $8.3 million.
As part of the acquisition, the highly-experienced geologist Damien Koerber is joining the company. He brings a wealth of exploration and operations experience, having operated at Cerro Bayo and multiple locations in South America.
During his career, he has been directly involved in several mainly gold and silver discoveries including Cleo-Sunrise Dam (Western Australia), Tanami (Northern Territory), Union Reefs (Northern Territory) and Cap Oeste-COSE (Argentina).