Advance Metals (ASX: AVM) has made a significant move with its plans to acquire the precious metals-rich Yoquivo silver project in north-west Mexico from Golden Minerals Company.

It is a move the market has welcomed, with Advance’s share price jumping by nearly 40% after the announcement on Friday.

The proposed acquisition – which Advance sees as a very low-cost opportunity to establish a foothold in the silver sector – would add to the company’s portfolio of battery and base metals exploration assets in the USA.

Exploration upside

Advance has already identified significant upside, with Yoquivo containing numerous historic bonanza-grade silver drill intersections.

The acquisition will also come with a substantial amount of data to assess, as Golden Minerals completed 70 diamond holes for a total of 16,565 metres in three drilling programs between 2020 and 2022.

Located 35km south-east of the Ocampo mining district, Yoquivo currently contains a foreign resource estimate of 17.23 million ounces of silver equivalent at 570 grams per tonne.

Advance is now planning a program of systematic exploration and further drilling to help establish a maiden JORC mineral resource estimate and demonstrate mineralisation potential.

Due diligence option

Advance has agreed to make a $30,000 initial non-refundable cash payment for a 7-day exclusive due diligence period beginning on the date of execution of the sale agreement, after which the company will be required to outlay an approximate cash payment of $415,000.

Following 28 calendar days, Advance will then make a further final cash payment of approximately $415,000.

A third-party net smelter return royalty will be payable by Advance on all the concessions, ranging from 2% to 3%.

Non-executive chair Craig Stranger said the acquisition “represents a compelling value proposition to Advance shareholders on highly attractive terms.”