Precious metals miner Great Panther will sell its Mexican subsidiary, which holds the Guanajuato mine complex (GMC), the Topia mine, as well as the El Horcon and Santa Rosa projects, to Guanajuato Silver (GSilver).
"This is a strategic transaction that places the GMC and Topia mines in the hands of an operator who is well positioned to unlock additional value from the assets and maintain a strong commitment to employees and local stakeholders," said chairperson and interim CEO Alan Hair.
Further, GSilver's processing and tailings facilities in the district provide the platform for a near-term restart of operations at the GMC, he said.
The sale of the silver mines in Mexico will allow Great Panther to focus on maximising the full potential of the Tucano gold mine, in Brazil, and complete the pivot to gold started by the company in 2019.
“Our capital allocation priorities are focused on Tucano as this is where we see the greatest value creation potential for our stakeholders. We expect Tucano to return to steady-state production in the second half of the year and intend to continue investing into unlocking value both from the underground, as well as the regional potential of the district.
Our long-term objective is to grow further in Brazil. Divesting the Mexican silver assets best positions the company to achieve these goals,” said Hair.
Under the terms of the agreement, GSilver will purchase the subsidiary for a total upfront consideration of $14.7-million and up to $2-million in additional payments.
Closing of the agreement, expected in the third quarter of 2022, is subject to satisfaction of certain conditions including receipt of all requisite third-party and regulatory approvals.