COFECE Approves Sierra Madre’s Acquisition of La Guitarra

Sierra Madre Gold and Silver announced that Mexico’s Federal Economic Competition Commission (COFECE) approved its acquisition of First Majestic Silver’s La Guitarra silver-gold mine in Temascaltepec, State of Mexico. With the new agreement, the La Guitarra Project will be added to Sierra Madre’s portfolio, which currently features the La Tigra and Tepic projects. 

The company expects to finalize the acquisition process on March 30. After that, Sierra Madre’s shares will be available once again. "We are excited for the finalization of this transformational acquisition of a fully permitted mine and mill, which will help us advance toward our goal of becoming a mid-tier precious metals producer. Upon closing of the transaction, Sierra Madre will hold three exciting precious metal properties in Mexico: La Guitarra, Tepic and La Tigra," said Alexander Langer, CEO, Sierra Madre.

On May 25, 2022, Sierra Madre Gold and Silver signed an agreement with First Majestic Silver to fully purchase the La Guitarra mine. Previously, the former company highlighted that its team, especially Greg Liller and Luis Saenz, COO and Director of Exploration and Development, respectively, had experience working on the La Guitarra project. 

Liller said La Guitarra might be one of the largest underdeveloped projects in the country. Its eastern part features high-grade ore mines that were significant during the Spanish colonial period. Nevertheless, the area has not seen significant development in recent times. He recognized the work First Majestic has done in maintaining the required permits and preparing development plans to restart operations.

In December 2022, 99.99 percent of the shareholders voted in favor of the acquisition of all the issued and outstanding shares of La Guitarra Compañia Minera. According to the contract, Sierra Madre will issue 69,063,076 common shares to First Majestic, with an aggregate value of US$44.89 million.

La Guitarra is a high-grade underground silver mine that produced plenty of silver in the past, with an extension of over 39,000ha. It produced over 1.5Moz/y of gold and silver between 2015 and 2018, when the mine stopped operations. Its current infrastructure includes two underground centers, La Guitarra and Coloso, as well as a 500t/d flotation mill and tailings facilities, among other features.