Image credits: Billy Clouse
News Article

Great Panther Sells its Mexican Assets to Guanajuato Silver

By Fernando Mares | Mon, 07/04/2022 - 17:07

Guanajuato Silver announced it reached an agreement to acquire all of Great Panther’s Mexican assets. The companies said that the transaction will strengthen Guanajuato Silver’s operations, while allowing Great Panther to focus on projects in Brazil instead. 

According to the agreement, Guanajuato silver will acquire Great Panther’s subsidiary Minera Mexicana El Rosario (MMR), which owns the Guanajuato Mine Complex, the Topia mine and production facility, as well as the El Horcón and Santa Rosa projects. This transaction will expand Guanajuato Silver’s assets to a total of five mines and three production facilities and will boost the company in its goal to become a mid-tier precious metal producer in Mexico. Guanajuato Silver expects these projects to complement the assets it already owns. The company furthermore decided to change the Guanajuato Mine Complex’s name to Valenciana.

“This acquisition will prove instantly accretive. The Topia mine is currently producing and will immediately lift Guanajuato Silver’s production profile. The San Ignacio and Valenciana Mines were put on care and maintenance less than eight months ago only due to a lack of tailing facilities. Guanajuato Silver plans to swiftly restart production from these mines and process the mineralized material, using the excess capacity at our El Cubo production facilities,” said Ramon Davila, President and Director, Guanajuato Silver. 

Great Panther considers this agreement to be fruitful for both parties. Guanajuato Silver’s existing facilities will add value to the Guanajuato Mining Complex, allowing it to restart operations in the near future. The sale will allow also Great Panther to focus on its El Tucano Gold Mine in Brazil, which the company expects to return to steady-state in 2H22. “Our long-term objective is to grow further in Brazil. Divesting the Mexican silver assets best positions the company to achieve these goals,” said Alan Hair, Chair and Interim CEO, Great Panther. 

According to the agreement, Guanajuato Silver will pay US14.7 million to Great Panther. Of this payment, US$8 million will be in cash and the remaining US$6.7 million will be paid via 25,787,200 of Guanajuato Silver’s common shares. In addition, Guanajuato Silver will have to pay up to US$2 million when reaching various milestones: US$500,000 upon Guanajuato Silver producing 2.5Moz of silver at Minera Mexicana El Rosario, another US$500,000 if the silver price closes at or above US$27.50/oz for 30 consecutive days within two years after closing and, finally, US$750,000 if prices close at or above US$30/oz. 

Guanajuato Silver is a Canada-based mining company. Before the deal the company owned two mining projects in Guanajuato: El Cubo, its only producing project and El Pinguico, which the company aims to restart.

The data used in this article was sourced from:  
Guanajuato Silver, Great Panther
Photo by:   Billy Clouse
Fernando Mares Fernando Mares Junior Journalist and Industry Analyst