VANCOUVER (miningweekly.com) – Canadian project developer Leagold Mining has completed the acquisition of the Los Filos gold mine, in Mexico, for $350-million from compatriot major miner Goldcorp.

"Today marks a strong beginning for Leagold with the Los Filos mine becoming our platform for growth. We have transformed into a low-cost gold producer in Mexico and we will immediately focus on optimising the mine and progressing the drilling programmes and related preparation work for the development of a new underground mine at Bermejal,” CEO Neil Woodyer stated in a press release Friday.

The Los Filos operations consist of two openpit mines, Los Filos and Bermejal, an underground mine at Los Filos, and the opportunity to develop a new underground mine at Bermejal as an expansion project. During 2016, Los Filos produced 231 000 oz of gold at an all-in sustaining cash cost of $878/oz.

Leagold has completed a C$179-million equity financing, $50-million private equity placement, and $150-million senior secured term loan in connection with the deal.

After closing of the transaction, Leagold estimates its cash balance to be about $76-million.

Pursuant to the deal, Goldcorp executive VP for corporate development and CFO Russell Ball has joined Leagold's board.

Leagold aims to build a new midtier gold producer with a focus on opportunities in Latin America.

Leagold’s entire management were involved in the successful growth of Endeavour Mining into a major West African gold producer, and in identifying and acquiring gold mines and attractive development projects. With Leagold, the team intends to replicate the ‘buy and build’ strategy and repeat its success.

“We continue our search for additional acquisition and growth opportunities in Latin America, as we seek to grow into a multi-mine operator and create the next intermediate gold producer,” Woodyer added.

"The divestiture of Los Filos unlocks further value and allows us to focus on our core camps. We look forward to participating in the future success of Leagold through our significant ownership interest,” Goldcorp president and CEO David Garofalo stated.

Under the terms of the transaction, Goldcorp received 34.63-million common shares of Leagold, representing 25.3% of Leagold's issued and outstanding common shares, $250-million in cash and a $29-million short-term promissory note that is due on the earlier of 120 days from closing or Leagold receiving approval from the Mexican competition commission on a subsequent tranche of its equity financing. Following the completion of the second tranche of its equity financing, Goldcorp’s ownership on an as-issued basis will be 22.9% of Leagold's issued and outstanding shares. Goldcorp also retained certain tax receivables worth about $100-million.