Toronto- and New York-listed Excellon Resources will acquire the past-producing La Negra mine, in Mexico, from an entity owned by investment fund manager Orion Resources.
Excellon will buy the project for a total consideration of $50-million, paid through upfront payments totalling $20-million in shares and a $30-million deferred payment in shares of cash following the restart of commercial production.
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 says La Negra could be restarted within 12 to 18 months, positioning the company for operational readiness by early 2024.
“The acquisition of Le Negra will be transformational for Excellon, with the goal of returning the company to producer status on an accelerated timeline,” comments president and CEO Shawn Howarth.
He adds that Excellon sees significant upside potential in the currently defined mineral resource estimates, with the mine, despite a 50-year production history, remaining relatively under-explored.
La Negra has indicated mineral resources of about 15.1-million ounces of silver-equivalent and inferred resources of about 41.8-million ounces of silver equivalent.
A March 2022 preliminary economic assessment demonstrates an aftertax net present value, using a 5% discount, of $132.4-million.