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First Majestic to sell silver mine to Golden Tag

Published by , Editorial Assistant
Global Mining Review,

First Majestic Silver Corp. has announced that it has entered into an asset purchase agreement to sell its 100% owned past producing La Parrilla Silver mine located in the state of Durango, Mexico to Golden Tag Resources Ltd. for total consideration of up to US$33.5 million.

On closing of the Transaction, First Majestic will receive 143 673 684 Golden Tag shares at a deemed price of CAN$0.19 per share having an aggregate value of US$20.0 million (and representing approximately 40% of the outstanding shares in Golden Tag. First Majestic will receive up to US$13.5 million in the form of three milestone payments in either cash or shares in Golden Tag with the share price and number of shares to be determined upon the anniversary date.

Pursuant to a support agreement to be entered into at closing, First Majestic will agree to support the board of directors of Golden Tag and will be granted a pre-emptive right to maintain its shareholdings (up to a maximum of 19.9%). First Majestic has also agreed to participate in a future Golden Tag equity financing of up to CAN$9 million, with participation of US$2.7 million by First Majestic.

The La Parrilla Silver Mine is a past producing silver, gold, lead and zinc operation that was placed under care and maintenance by First Majestic in September 2019. Golden Tag is a Toronto based mineral resource exploration company focused on the exploration and development of the San Diego Project, in Durango State Mexico.

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Silver mining news Mexican mining news