Vancouver’s First Majestic Silver Corp. (NYSE: AG) (TSX: FR) has closed the sale of its past-producing La Parrilla silver mine in Durango, Mexico following approval from local authorities and the TSX Venture Exchange.
The company announced Monday that it received approximately 146.7 million shares at $0.19 a piece from the buyer Golden Tag Resources Ltd. (TSX-V: GOG) through the deal — valued at $27 million and representing 40.8 per cent of Golden Tag’s common shares.
“Today is an exciting day for Golden Tag as we acquire the past producing La Parrilla silver mine complex. We now have two very high-quality silver projects located in close proximity to each other within Durango State. The La Parrilla processing plant has the capability to support both projects,” said Golden Tag’s President and CEO Greg McKenzie.
First Majestic will also be receiving up to $13.5 million in additional milestone payments from the company in the form of cash or shares once certain conditions are met.
Milestone payment descriptions. Image via First Majestic
First Majestic currently has a cash position of $160.2 million and employs over 4,100 people. The company produced 2.6 million ounces of silver and 45,022 ounces of gold last quarter and has three producing mines in Mexico: San Dimas, Santa Elena and La Encantada.
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Golden Tag’s primary operation is the San Diego project in Durango’s Velardeña Mining District, a site that has had 33,000 metres of diamond drilling completed since 2005. The company believes it to be one of Mexico’s largest undeveloped silver assets.
The La Parrilla operation the company now owns produced 34.3 million ounces of silver equivalent between 2005 and 2019 and is comprised of five underground mines and a past-producing open pit.
First Majestic has an online Bullion Store where it sells silver bars, coins, ingots and medallions to the public. The company also sold the past-producing La Guitarra silver mine to Sierra Madre Gold & Silver Ltd. (TSX-V: SM) in March for $44.9 million.
First Majestic’s shares dropped by 1.5 per cent Wednesday to $7.85 on the Toronto Stock Exchange and have steadily declined by over 30 per cent since January 1.
Golden Tag stock dropped by 13.64 per cent to $0.095 on the TSX Venture Exchange.
rowan@mugglehead.com
