Great Panther Mining Limited (TSX:GPR, NYSE:GPL) said it has closed the sale of its Mexican subsidiary Minera Mexicana El Rosario SA de CV to Guanajuato Silver Company Ltd (TSX-V:GSVR, OTCQX:GSVRF).
The subsidiary owns the Guanajuato mine complex, the Topia mine, and El Horcon and Santa Rosa projects.
Purchase consideration comprised $8,000,000 of cash, plus additional cash of approximately $1,350,000 under a working capital adjustment, together with 25,787,200 common shares of Guanajuato Silver, valued at approximately $6,700,000 as of the announcement of the transaction on June 29, 2022, and $8,921,172 as of the close of business on August 4, 2022.
Great Panther will also receive $500,000 if at any time following the closing date, the Guanajuato mine complex and Topia mines produce an aggregate of 2.5 million ounces of silver.
READ: Great Panther Mining divests Mexican silver assets
The company said it will also receive a further $750,000 if the price of silver closes at or above $27.50 per ounce over a period of 30 consecutive trading days at any time within two years of the closing, and $750,000 if the price of silver closes at or above $30.00 per ounce over a period of 30 consecutive trading days at any time within three years of the closing.
Great Panther said approximately $3,450,000 of the sale proceeds were used to repay all outstanding indebtedness under a lead concentrate prepayment agreement between Minera Mexicana, the company and Samsung (KS:005930) C&T U.K. Ltd, a wholly-owned subsidiary of Samsung C&T Corporation.
Upon completion of the transaction, the company issued 171,153 common shares to its financial advisor at a deemed issue price of $1.30. The shares are subject to a four-month hold period under Canadian securities law that will expire on December 5, 2022.
Great Panther is a precious metals producer focused on the operation of the Tucano Gold Mine in Brazil, where the company controls a land package covering nearly 200,000 hectares in the prospective Vila Nova Greenstone belt.
Contact the author at jon.hopkins@proactiveinvestors.com