Toronto-listed Excellon Resources’ acquisition of the past-producing La Negra mine, in Mexico, had fallen through, the company announced on Thursday, explaining that the seller had unexpectedly issued it with a notice to terminate the transaction.
Excellon in January announced it was buying the mine from an entity owned by Orion Resource Partners for $50-million.
“Prior to the receipt of the termination notice, the company had been in discussions with Orion regarding options to advance the acquisition of La Negra to closing, including securing necessary financing,” Excellon said in a statement.
Consequently, the company cancelled its previously announced subscription receipts offering.
Excellon also said it was in discussions with holders of more than two-thirds of its principal of its outstanding convertible debentures, maturing on July 30, in the amount of C$17.9-million, with a view to extending the maturity date and more broadly restructure the debentures.
Meanwhile, the firm announced that Jeff Swinoga and Zoya Shashkova had resigned from the board of directors with effect from July 23.
The board has reconstituted the audit committee with immediate effect. Laurie Curtis, the company's independent chair of the board, will remain a member of the audit committee and Craig Lindsay and Brendan Cahill were appointed to fill the vacancies.
La Negra historically produced an average of three-million silver-equivalent ounces a year. The brownfield site is permitted to restart production and has existing infrastructure, including a 3 000 t/d mill.
Excellon previously said La Negra could be restarted within 12 to 18 months, positioning the company for operational readiness by early 2024.