A strategic transaction that is the next step towards becoming a gold company focused on maximizing potential of the Tucano Gold Mine and pursuing further growth in Brazil
Great Panther Mining Limited (TSX: GPR) (NYSE-A: GPL) (“Great Panther” or the “Company”), a growth-oriented precious metals producer focused on the Americas, announces that it has entered into a Share Purchase Agreement (the “Agreement”) with Guanajuato Silver Company Ltd. (“GSilver”) to sell 100% of the Company’s Mexican subsidiary Minera Mexicana El Rosario S.A. de C.V. (“MMR”), which holds the Guanajuato Mine Complex (the “GMC”), the Topia mine, and the El Horcón and Santa Rosa projects, all located in Mexico.
“This is a strategic transaction that places the GMC and Topia mines in the hands of an operator who is well positioned to unlock additional value from the assets and maintain a strong commitment to employees and local stakeholders,” stated Alan Hair, Chair and Interim CEO. “Furthermore, GSilver’s processing and tailings facilities in the district provide the platform for a near-term re-start of operations at the GMC.
“The sale of the Company’s silver mines in Mexico will allow us to focus on maximizing the full potential of the Tucano Gold Mine in Brazil and complete the pivot to gold started by the Company in 2019. Our capital allocation priorities are focused on Tucano as this is where we see the greatest value creation potential for our stakeholders. We expect Tucano to return to steady-state production in the second half of the year and intend to continue investing into unlocking value both from the underground as well as the regional potential of the district. Our long-term objective is to grow further in Brazil. Divesting the Mexican silver assets best positions the Company to achieve these goals.”
Under the terms of the Agreement, GSilver will purchase MMR for a total upfront consideration of US$14,700,000 million plus up to US$2 million in additional payments, payable as follows:
- US$8,000,000 cash payable on closing
- A total of 25,787,200 common shares of GSilver valued at approximately US$6,700,000 based on current trading prices
- US$500,000 upon producing 2.5 million ounces of silver from the GMC and Topia
- US$750,000 upon the price of silver closing at or above US$27.50 per ounce over a 30-day period in the two years following the Agreement
- US$750,000 upon the price of silver closing at or above US$30.00 per ounce over a 30-day period in the two years following the Agreement
In conjunction with closing, MMR will repay the balance outstanding of the Samsung lead concentrate prepayment facility, and accordingly Samsung will release the pledge of MMR shares associated with this facility. Great Panther has engaged GenCap Mining Advisory Ltd. as its sole financial advisor and McCarthy Tétrault LLP and RB Mexico Law-Abogados as its legal advisors in connection with the Agreement. Closing of the Agreement, expected in the third quarter of 2022, is subject to satisfaction of certain conditions including receipt of all requisite third-party and regulatory approvals.
Source: Company Press Release