Golden Tag to Acquire La Parrilla Complex
This week, First Majestic Silver announced it entered an Asset Purchase Agreement to sell its 100 percent-owned La Parrilla silver mine located in the state of Durango to Golden Tag Resources for a total of up to US$33.5 million.
First Majestic will receive 143,673,684 Golden Tag shares at the price of CDN$0.19 (US$0.14) per share with an aggregate value of US$20 million. The number represents approximately 40 percent of the outstanding Golden Tag shares. In addition, First Majestic will receive up to US$13.5 million in the form of three milestone payments in either cash or Golden Tag shares, with the share price and the number of shares to be determined later.
The La Parrilla Silver mine has 69,478ha and is an old mining complex in fully permitted production. It has five underground silver mines of high-grade silver and one open pit mine. The mine was continually operating from 2004 until September 2019, when it was placed under care and maintenance by First Majestic.
The property produced 34.3 million oz of silver equivalent under First Majestic with an average annual production of approximately 3.1 million oz. The complex has an excellent infrastructure including a 2,000t/d processing plant, a dry stack filter plant with approximately 9 years of tailing capacity available, numerous buildings including a doré refinery and a partial underground mining fleet.
“We are honored to partner with First Majestic in the acquisition of La Parrilla, their first producing silver mine, which has produced 34.3 million oz of AgEq under their ownership. Over the past two years, we have evaluated several opportunities for growth in the silver space and La Parrilla is a great opportunity. The mine complex is fully permitted, located only 45 minutes on paved roads from Durango and only a few hours from our existing San Diego project,” said Greg McKenzie, President and CEO, Golden Tag.
McKenzie added that this is a transformative acquisition for the company and that it strongly believes in the upside resource growth potential of this long-life prolific asset. Moreover, he commented that the company’s short-term goal is to commence exploration within and near mine works to expand the resource base and support its ultimate goal and vision of putting the asset back into production.