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Great Panther completes sale of Guanajuato Mine Complex and Topia Mine

Published by
Global Mining Review,

Great Panther Mining Ltd has closed the previously announced sale of its Mexican subsidiary Minera Mexicana El Rosario S.A. de C.V. (MMR), which owns the Guanajuato Mine Complex (the GMC), the Topia mine, and the El Horcón and Santa Rosa projects, to Guanajuato Silver Company Ltd (GSilver).

The consideration payable to the company comprised:

  • US$8 million of cash, plus additional cash of approximately US$1.35 million pursuant to the working capital adjustment.
  • 25 787 200 common shares of GSilver, valued at approximately US$6.7 million as of the announcement of the transaction on 29 June 2022, and US$8 921 172 as of the close of business on 4 August 2022.
  • US$500 000, if at any time following the closing date the GMC and Topia produce an aggregate of 2.5 million oz of silver.
  • US$750 000 if the price of silver closes at or above US$27.50/oz over a period of 30 consecutive trading days at any time within two years of closing.
  • US$750 000 if the price of silver closes at or above US$30.00/oz over a period of 30 consecutive trading days at any time within three years of closing.

50% of the shares are subject to the statutory hold period of four months, 25% are subject to an eight-month hold period and the remaining 25% are subject to a 12-month hold period. The US$1.35 million working capital adjustment described above is based on estimate of the difference between MMR's working capital at closing and an agreed target level of working capital. The final adjustment will be determined post-closing.

Approximately US$3.45 million of the sale proceeds were used to repay all outstanding indebtedness pursuant to a lead concentrate prepayment agreement between MMR, the company (as guarantor) and Samsung C&T U.K. Ltd, a wholly owned subsidiary of Samsung C&T Corp. Upon repayment of the Samsung indebtedness, Samsung released its security interest in the MMR shares and GSilver assumed all future obligations of the company under the agreement.

Upon completion of the transaction, the company issued 171 153 common shares to its financial advisor at a deemed issue price of US$1.30. The shares are subject to a four month hold period under Canadian securities law that will expire on 5 December 2022.

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