Patagonia Gold said it has secured an investment of $40 million to support the development of its flagship Calcatreu project in Rio Negro, Argentina. 

According to the Canadian gold junior, the investment is being led by Argentine businessman Carlos J. Miguens, a director and major shareholder of the company with a 43.2% equity stake.

Under the investment agreement, Black River Mine — a newly created company controlled by Miguens — will acquire 40 million preferred shares of Patagonia’s subsidiary that holds the Calcatreu project. In exchange, Black River would have the right to a 40% interest in the project and cash distributions from the gold operation.

The Calcatreu property, located 85 km south of the town of Ing Jacobacci, is estimated to hold more than 1 million oz. in gold-equivalent resources, including 746,000 oz. in the measured and indicated category.

Patagonia acquired the project from Pan American Silver in 2018 for $15 million, and has since been working to bring the deposit towards production. Last November, the company secured all permits for the mine’s construction.

In addition to Calcatreu, Patagonia also holds a number of projects in Argentina’s Santa Cruz province, including three advanced-stage gold-silver assets.