Sierra Madre Gold and Silver Ltd. has signed an arm’s length definitive agreement with First Majestic Silver Corp. to acquire a 100% interest in the 39 714 ha. La Guitarra Silver-Gold Property in the Temascaltepec mining district, Mexico.
La Guitarra is in the southeast end of the Mexican Silver Belt with an underground mine operating up until August 2018 at the site. Past production was in the order of 1 million to 1.5 million AgEq oz annually between 2015 and 2018. Current infrastructure includes two underground centres (La Guitarra and Coloso), the 500 tpd flotation mill, permitted tailings facility, multiple work buildings, equipment, and related infrastructure.
Sierra Madre will acquire all of the issued and outstanding shares of La Guitarra Compania Minera S.A. de C.V., a wholly-owned subsidiary of First Majestic incorporated under the laws of Mexico that holds a 100% interest in La Guitarra. In exchange, Sierra Madre will issue to First Majestic approximately 69 million Sierra Madre common shares at a deemed price of US$0.65, having an aggregate value of US$35 million.
Alex Langer, Sierra Madre’s President and Chief Executive Officer, comments:
“We are thrilled to announce this transformative acquisition of the fully permitted La Guitarra Mine. The underground mine and 500 tpd mill will advance Sierra Madre towards its goal of become a mid-tier precious metals company. Greg Liller, our COO, Luis Saenz, our Director of Exploration and Development and other members of the team operated the La Guitarra mine under prior ownership from 2006 to 2009. We intend to provide more details on our planned work program in the coming months and will announce additions to our team shortly.
“Upon completion of this transaction, First Majestic will become our largest shareholder. We would like to thank First Majestic for entrusting us with this opportunity, and look forward to welcoming them as our largest shareholder and their guidance on the development of La Guitarra. Upon closing of the transaction, Sierra Madre will hold three exciting precious metal projects in Mexico -La Guitarra, Tepic, and La Tigra.”
Greg Liller, Sierra Madre’s Executive Chairman and Chief Operating Officer, comments:
“Based on my experience with running the La Guitarra mine and overseeing the district’s first large-scale exploration program, I have always believed La Guitarra is one of the largest undeveloped silver opportunities in Mexico. The eastern portion of the district was host to large high-grade mines that were significant producers during the Spanish colonial period. This area has only seen limited modern drilling and exploration even though it is host to hundreds of old mines, prospects, workings and veins. Luis Saenz, our Director of Exploration and Development, has assembled an experienced team to further develop La Guitarra.
“First Majestic has done an excellent job in maintaining all permits and preparing development plans necessary for restarting operations. This includes a fully permitted new tailings facility with a 5.8 million t capacity. The underground development along with the milling and processing facility has been well maintained. The historic and modern exploration data, executing studies on restarting operations, and completed metallurgical test work on reprocessing the existing tailings have also been completed. This database will allow the company to proceed with a three-pronged approach to restarting production at La Guitarra:
- A district scale exploration and mine development program.
- Completing National Instrument 43-101 - Standards of Disclosure for Mineral Projects (NI 43-101) compliant resource and reserve estimations for areas of the mine active when operations were suspended.
- Reprocessing the existing tailings.”
Read the article online at: https://www.globalminingreview.com/mining/27052022/sierra-madre-acquires-la-guitarra-silver-gold-mine-from-first-majestic-silver/