Santacruz Silver Mining has signed a $2.5m binding agreement to transfer its interest in the El Gachi Property in Sonora State, Mexico, to First Majestic Silver.
The consideration is subject to VAT adjustments. The El Gachi Property includes an area of 48,057ha situated adjacent to First Majestic's Santa Elena Mine in Sonora State, Mexico.
Santacruz president and CEO Arturo Préstamo said: “With our corporate strategic focus being concentrated on our two producing projects, Veta Grande and Rosario, the El Gachi Property became a non-core asset in our mineral property portfolio.
“As such, we are pleased to enter this transaction with First Majestic which allows us to monetise our investment, pay down debt, and provide additional working capital for our core operations.”
Santacruz plans to pay nearly $750,000 of the total proceeds to JMET as partial repayment of its outstanding loan and $580,000 to Minera Hochschild Mexico.
Completion of this transaction is subject to multiple customary conditions that include satisfactory completion of due diligence by First Majestic.
A Mexican-focused mining company, Santacruz Silver Mining intends to become a mid-tier silver producer.
It owns a producing mine (Rosario), two advanced-stage projects (San Felipe and Gavilanes) and an early stage exploration project (El Gachi) in the country.
First Majestic owns and operates six silver mines in Mexico. These mines are La Parrilla, La Encantada, San Martin, Del Toro, La Guitarra and Santa Elena.
Image: First Majestic Silver's La Parrilla mine in Mexico. Photo: courtesy of First Majestic Silver.