Fortuna Mining Sells San Jose Mine to Peruvian Firm

Canada-based mining company Fortuna Mining announced the successful completion of the sale of its Compañia Minera Cuzcatlán (CMC) asset to Peru-based JRC Ingeniería y Construcción (JRC).

CMC held full ownership of the San Jose mine in Oaxaca. The transaction closed concurrently with the execution of a definitive share purchase agreement. Under the agreement terms, JRC acquired all issued and outstanding shares of CMC held by Fortuna Mining’s subsidiaries. The consideration for the acquisition includes a payment of US$6.5 million and an additional payment of approximately US$1.2 million for pre-paid working capital items and tax receivables, due by April 30, 2025. Furthermore, Fortuna is entitled to receive up to approximately US$8.3 million upon the completion of certain conditions.

In addition to these payments, Fortuna will retain a 1% net smelter royalty on production from the San Jose mine concessions. This royalty will become payable after the mine has produced the first 6.1Moz of silver and the first 44,000oz of gold, or 119,000oz gold equivalent (AuEq).

Why Was the San Jose Mine Sold?

On Jan. 15, 2025, Fortuna Mining announced it entered a binding letter agreement to sell CMC to Minas del Balasas (MDB). Under the terms of the agreement, MDB would acquire all shares of CMC from Fortuna Mining’s subsidiaries. The deal involved a payment of US$2 million upon closing, with an additional US$2 million payable on the first anniversary of the transaction’s closure, and a final US$2 million on the second anniversary. Fortuna also was to receive up to approximately US$11 million, subject to the completion of certain conditions, which the company did not specify, as well as a 1% net smelter return royalty on production, as reported by MBN.

At the time, the company said the San Jose mine, once one of the world’s 12 largest primarily silver-producing mines, was no longer a core asset due to the depletion of its reserves. While the company recognizes it still holds mineral resources, it does not meet the company’s economic criteria for mineral reserve classification. “Fortuna successfully built, expanded, and operated the underground San Jose mine for thirteen years, developing it into one of the 12 largest primary silver producers in the world for several years. This transaction allows us to focus management’s efforts on higher value opportunities within our portfolio,” said at the time Jorge Ganoza, President and CEO, Fortuna Mining. 

Despite previously expressing confidence in MDB’s ability to further develop the asset, Fortuna Mining announced the termination of its sale agreement with the company on March 6, 2025.