LUCA ANNOUNCES AGREEMENT TO ACQUIRE EL BARQUEÑO FROM AGNICO EAGLE
Luca agrees to acquire the El Barqueño project from Agnico Eagle with staged cash-and-share payments, NSR terms and permitting challenges.
Rhea-AI Summary
Luca Mining (LUCMF) signed a definitive asset purchase agreement on September 17, 2026 to acquire 100% of the El Barqueño gold-silver-copper project in Jalisco, Mexico from a Mexican subsidiary of Agnico Eagle.
The over-32,000-hectare property has road access and hosts a 2025 historical mineral resource estimate of 399,265 ounces gold equivalent indicated at 1.47 g/t AuEq and 650,046 ounces inferred at 1.43 g/t AuEq, which Luca treats as historical and not current and states should not be relied upon. Consideration includes an initial US$10 million in Luca shares at closing, up to US$30 million in drilling and production-linked contingent payments in cash or shares, and up to US$20 million tied to production milestones, plus a 2.0% NSR on certain areas with a buyback right for half at US$12.5 million. Closing is targeted for Q4 2026, subject to Mexican and TSX Venture Exchange approvals and customary conditions.
Positive
- El Barqueño acquisition adds a 100% owned gold-silver-copper development project in Jalisco, Mexico
- Initial consideration limited to US$10 million in Luca shares at closing
- Up to US$30 million in milestone-linked payments deferred to drilling start and commercial production
- NSR flexibility via right to repurchase half of Agnico Eagle’s 2.0% NSR for US$12.5 million
Negative
- Potential future obligations of up to US$30 million contingent plus up to US$20 million production-linked payments
- Additional NSR burden of 2.0% on areas with current defined resources, on top of existing Northern deposit royalties averaging 3.7%
- Project not currently permitted for exploration drilling due to the Jalisco POETR planning program and ongoing Amparo proceeding
- Historical resource is not a current NI 43-101 mineral resource and is stated as not to be relied upon
News Explained
Closing would require Luca to issue initial shares to Agnico Eagle, with further equity possible while exploration permitting remains unresolved.
Luca has signed the El Barqueño purchase agreement, but closing is still expected in the fourth quarter of 2026; if completed, the initial
The release also makes the up-to-
El Barqueño is not currently permitted for exploration drilling because of the Jalisco POETR, while an Amparo proceeding concerning that restriction remains ongoing; that named legal pathway must be resolved before the stated exploration route is re-confirmed.
AI-generated analysis. How Rhea-AI works. Not financial advice.
The El Barqueño property covers over 32,000 hectares, is accessible by paved and secondary roads, and is located in the
Dan Barnholden, Luca's CEO and Director, commented, "The acquisition of El Barqueño will be a highly strategic and accretive transaction for Luca. We are excited to add a high-quality, high-grade gold-silver-copper development project to our portfolio of mining assets in
"Furthermore, our exploration team is excited to evaluate the growth potential at El Barqueño with a large-scale, regional exploration focus. We look forward to building on Agnico Eagle's strong track record of community involvement, social governance and environmental stewardship at the Project, and we are pleased to add Agnico Eagle as a significant Luca shareholder."
Paul Gray, Luca's Vice President of Exploration, added, "El Barqueño is a property with excellent infrastructure, a first-class geologic and exploration database, and numerous high-priority targets that require follow up exploration. Upon receipt of exploration permits, Luca's exploration team is excited to build upon these substantial historic exploration efforts. We are confident that the El Barqueño property will yield many additional exploration discoveries over the coming years."
Transaction Summary and Timing
On closing, Luca will acquire
- An initial payment of
$10 million - Deferred consideration of up to
$30 million $15 million $15 million
- Additional consideration of up to
$20 million $5 million - A
2.0% net smelter return ("NSR") interest granted to Agnico Eagle on all metal production solely in respect of certain areas of the El Barqueño property which host currently defined mineral resources. Luca will have the right to repurchase one-half of the NSR (reducing the NSR to1% ) at any time for$12.5 million
Closing of the Transaction is expected to occur in the fourth quarter of 2026, and is subject to the receipt of all required regulatory approvals, including approval from the Mexican Federal Economic Competition Commission and the TSX Venture Exchange ("TSXV"), and other customary closing conditions for a transaction of this nature.
El Barqueño Project Background
Agnico Eagle acquired the El Barqueño property through acquisitions of Cayden Resources and Soltoro Ltd. in 2014 and 2015, respectively. Agnico Eagle subsequently conducted approximately 225,000 metres of exploration drilling, primarily between 2015-2018. The overall historic exploration effort at El Barqueño totals approximately 300,000 metres of drilling. Mineralized deposits have been defined at the following areas (see Figures 2 and 3 below): Azteca-Zapoteca-Cuauhtémoc,
Local geology at the El Barqueño property includes a shallow dipping sequence of Cretaceous to Paleocene volcanic rocks as well as monzodiorite and diorite intrusives. The main mineralization style at the El Barqueño deposits is vein-breccia mineralization demonstrating sub-planar brecciated structures containing abundant fragments of quartz veins. Multi-stage crustiform quartz vein structures, stockwork breccias and fault-vein mineralization are also observed. Sulphide assemblages include pyrite, chalcopyrite, galena, sphalerite and chalcocite.
The El Barqueño property is not currently permitted for exploration drilling due to the existence of the
Historic Mineral Resource Estimate
The Project's north and south mineral resource estimates disclosed in Figure 2 below are historical in nature and are being treated by Luca as historical estimates NI 43-101. A Qualified Person (as defined in NI 43-101) has not done sufficient work to classify the historical estimate as current mineral resources. Luca is not treating the historical estimate as current mineral resources, and the historical estimate should not be relied upon. It is being shared strictly for informational purposes. Luca believes that the historical estimate is relevant to an appraisal of the merits of the Project and forms a basis upon which to develop future exploration programs. While the historical estimate has not been independently verified by the Company, the public disclosure of the data in accordance with NI 43-101 indicates that the historical estimate was prepared to a reasonably high standard. Following the closing of the Transaction, Luca plans to prepare a current mineral resource estimate for El Barqueño, develop exploration targets and analyze the economics of various scales of production.
In order to verify the historical estimate to a current mineral resource estimate, the Company will need to retain a Qualified Person to verify historical drilling and assaying methods and validate historical results, revise for current metal prices, and add any drilling and assaying or other pertinent geological information generated since the last estimation. There can be no assurance that any of the historical estimates, in whole or in part, will ever become economically viable.
Advisors and Counsel
ATB Cormark Capital Markets is acting as financial advisor to Luca, and Cassels Brock & Blackwell LLP is acting as legal advisor to Luca.
About Luca Mining Corp.
Luca Mining Corp. (TSX-V: LUCA, OTCQX: LUCMF, Frankfurt: Z68) is a Canadian mining company with two wholly owned mines located in the prolific Sierra Madre mineralized belt in Mexico. These mines produce gold, copper, zinc, silver, and lead, generating strong cash flow. Both mines have considerable development and resource upside as well as significant exploration potential.
The Company's Campo Morado Mine hosts VMS-style, polymetallic mineralization within a large land package comprising 121 square kilometres. It is an underground operation, producing zinc, copper, gold, silver and lead. The mine is located in Guerrero State.
The Tahuehueto Mine is a large property of over 100 square kilometres in Durango State. The project hosts epithermal gold and silver vein-style mineralization. Tahuehueto is a newly constructed underground mining operation producing primarily gold and silver. Luca has successfully commissioned its mill and is now in commercial production at Tahuehueto.
Qualified Person
The technical information contained in this news release has been reviewed and approved by Mr. Paul D. Gray, P.Geo., Vice President Exploration at Luca Mining. Mr. Gray is a Qualified Person for the Company as defined by NI 43-101.
On Behalf of the Board of Directors
(signed) "Dan Barnholden"
Dan Barnholden, Chief Executive Officer
For more information, please visit: www.lucamining.com
Cautionary Note Regarding Forward-Looking Statements
Statements contained in this news release that are not historical facts are "forward-looking information" or "forward-looking statements" (collectively, "Forward-Looking Information") within the meaning of applicable Canadian securities laws. Forward-Looking Information includes, but is not limited to: the closing of the Transaction and the anticipated timing thereof; the anticipated benefits of the Transaction, including anticipated synergies and the impact of the Transaction on the Company's operations, financial condition, and overall strategy; the Company's plans for and the potential success of future exploration and development activities, including expectations with respect to permitting, development and other work that may be required; the proposed timing of the Amparo proceeding and likelihood of success; future exploration activities and the anticipated results thereof, including the timing and results of future resource and/or reserve estimates; resource potential, including the potential quantity and/or grade of minerals, or the potential size of a mineralized zone; plans with respect to existing and new infrastructure; receipt of all necessary approvals with respect to the Transaction, including but not limited to the approval of the Mexican Federal Economic Competition Commission and the TSXV; satisfaction of the various conditions to closing of the Transaction and payment of the future contingent consideration; other statements relating to the financial and business prospects of the Company; information as to the Company's strategy, plans or future financial or operating performance; and other events or conditions that may occur in the future.
In certain cases, Forward-Looking Information can be identified using words and phrases such as "plans"," expects", "scheduled", "estimates", "forecasts", "intends", "anticipates" or variations of such words and phrases. In preparing the Forward-Looking Information in this news release, the Company has applied several material assumptions, including, but not limited to: the satisfaction of all conditions to closing the Transaction; the successful completion of the Transaction and the Company's ability to achieve the anticipated benefits therefrom; the accuracy of historical and forward-looking operational information and estimates; the Company's ability to successfully integrate the El Barqueño project into the Company's existing operations; the ability of the Company to successfully obtain all exploration permits; the ability of the Company to complete the necessary work required with respect to the El Barqueño and the anticipated benefits therefrom; the continuing accuracy of statements regarding El Barqueño, including the results of technical studies and the anticipated capital and operations costs, concession or claim renewal, permitting, mineral resource and/or reserve estimates, the cost of development, and other expected attributes of the properties, the timing of any environmental assessment processes, changes to configuration that may be requested as a result of stakeholder or government input to the environmental assessment processes, government regulations and permitting timelines; the future price of gold and other metals; currency exchange rates and interest rates; favourable operating conditions; political stability; timely receipt of governmental approvals, licenses, and permits (and renewals thereof); access to necessary financing; stability of labour markets and in market conditions in general; availability of equipment; the accuracy of mineral resource estimates, and of any metallurgical testing completed to date; the costs and expenditures to complete the Company's programs and goals; the speculative nature of mineral exploration and development and mining operations in general; there being no significant disruptions affecting the development and operation of the Company's properties; the availability of certain consumables and services and the prices for power and other key supplies being approximately consistent with assumptions; labour and materials costs being approximately consistent with assumptions; assumptions made in mineral resource estimates, including, but not limited to, geological interpretation, grades, metal price assumptions, metallurgical and mining recovery rates, geotechnical and hydrogeological assumptions, capital and operating cost estimates, and general marketing factors; requirements for additional capital; environmental risks; general business and economic conditions; delays in obtaining, or the inability to obtain, third-party contracts, equipment, supplies and governmental or other approvals; changes in law, including the enactment of mining law reforms; accidents; labour disputes; unavailability of appropriate land use permits; changes to land usage agreements and other risks of the mining industry generally; the inability to obtain financing required for the completion of exploration and development activities; changes in business and economic conditions; international conflicts; other factors beyond the Company's control; and those factors included herein and elsewhere in the Company's public disclosure.
Although the Company has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated, or intended. There can be no assurance that such information will prove to be accurate as actual developments or events could cause results to differ materially from those anticipated. These include, among others, the factors described or referred to elsewhere herein and include unanticipated and/or unusual events. Many of such factors are beyond the Company's ability to predict or control.
The Forward-Looking Information included in this news release is expressly qualified by the foregoing cautionary statements. Readers of this news release are cautioned not to put undue reliance on the Forward-Looking Information due to its inherent uncertainty. The Company disclaims any intent or obligation to update any Forward-Looking Information, whether as a result of new information, future events or results or otherwise, unless required under applicable laws. This Forward-Looking Information should not be relied upon as representing management's views as of any date subsequent to the date of this news release.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.
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SOURCE Luca Mining Corp.
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What are the main payment milestones for Luca’s acquisition of El Barqueño?
Consideration includes an initial US$10 million in Luca shares at closing, up to US$30 million of contingent payments, and up to US$20 million of production-linked payments. The contingent payments comprise US$15 million payable three months after commencement of the first drilling program at the project and US$15 million upon achievement of commercial production. The additional production payments are US$5 million for every 100,000 gold equivalent ounces produced, up to a maximum of 400,000 gold equivalent ounces.
How is the net smelter return (NSR) structured for El Barqueño after the transaction?
Agnico Eagle will receive a 2.0% NSR interest on all metal production from certain areas of El Barqueño that host currently defined mineral resources. Luca will have the right to repurchase one-half of this NSR, reducing it to 1%, at any time for US$12.5 million. Separately, the Northern deposits at the property are already subject to existing NSR royalties averaging 3.7%, while the Southern deposits have no pre-existing NSR royalties.
What is the permitting status of the El Barqueño project?
The El Barqueño property is not currently permitted for exploration drilling because portions of the project concessions are covered by the Jalisco Regional Ecological Territorial Planning Program (POETR). A direct Amparo proceeding is before the Fourth District Court for Administrative Matters in the State of Jalisco to challenge the application of the POETR to concessions that were granted before the POETR. Luca is working with Agnico Eagle on the ongoing Amparo and intends to continue pursuing a legal pathway to address the POETR’s application.
Where is El Barqueño located and what is its scale?
The El Barqueño property covers over 32,000 hectares in the State of Jalisco, Mexico. It is located approximately 100 km west of Guadalajara and is near the municipality of Guachinango. The project is accessible by paved and secondary roads.
What does Luca plan to do with the El Barqueño project after closing?
Following closing of the transaction, Luca plans to prepare a current mineral resource estimate for El Barqueño, develop exploration targets and analyze the economics of various production scales. To convert the historical estimate to a current mineral resource estimate, the company will need to retain a Qualified Person to verify historical drilling and assaying methods, validate results, revise for current metal prices, and incorporate any additional relevant geological information.