Mitre Mining (ASX: MMC) is looking to hit the ground running at its prized Cerro Bayo silver-gold project in Chile after completing an acquisition initially announced on 1 December 2023.

Mitre is now preparing to commence its maiden drilling program at the historic project located in the Aysén region in Southern Chile.

Cerro Bayo was in production for over 15 years, producing more than 45 million ounces of silver and 650,000oz of gold.

While the project has been on care and maintenance since October 2022, Mitre is confident Cerro Bayo’s existing joint ore reserves committee-inferred mineral resource estimate of 3.8 million tonnes at a grade of 206 grams per tonne silver equivalent (AgEq) for 24.7Moz of contained AgEq can transform the company into a major silver-gold exploration company.

In acquiring the project, Mitre identified significant upside for rapid growth with extensive known high-grade mineralisation outside the resource across the more than 300 sq km mining claim package incorporating Cerro Bayo and regional districts Cerro Diablo and Los Domos.

Cerro Bayo also includes infrastructure valued at over $150m to support a future restart of operations, including a 500,000tpa operational mill, extensive underground mines, power network, offices and workshops.

First drilling campaign

Interim executive director Ray Shorrocks said completion of the acquisition means Mitre can now move forward with plans to rapidly grow the project’s inferred resource.

“We have wasted no time preparing for the start of our first drilling campaign at Cerro Bayo,” Mr Shorrocks said.

“This is scheduled to start within the next couple of weeks and will target extensions to the known mineralisation, which remains open along strike and at depth.”

“We aim to complete a resource update within a couple of months or so, depending on the number of previously un-assayed drill samples we can turn around at our on-site laboratory.”

“Drilling will continue throughout this time with the goal of driving rapid, ongoing resource growth, which will in turn continue unlocking the enormous value of this project for Mitre shareholders.”

Strong financial position

Mitre is well funded to follow up on its rapid growth strategy with $2.6m in cash and approximately $6m from the second and final tranche of a recent capital raise that will be received imminently.

The company raised $8.3m in December in the first tranche of the placement conducted to fund the Cerro Bayo acquisition and its initial growth strategy.