First Majestic Announces Proposed Sale of La Parrilla Silver Mine
First Majestic Silver

On December 7, 2022, First Majestic Silver Corp. (NYSE: AG) declared that it had inked an Asset Purchase Agreement with Golden Tag Resources Ltd. (TSX.V: GOG) to sell their 100% owned past producing La Parrilla Silver Mine in the state-of Durango, Mexico for a total sum of US$33.5 million. The La Parrilla Silver Mine is an old silver, gold, lead, and zinc operation that was closed by First Majestic in September 2019. Golden Tag is a mineral resource exploration firm headquartered in Toronto and is mainly engaged in the exploration and development of the San Diego Project in Durango State, Mexico. The Transaction completion is contingent upon Golden Tag attaining the consent of the TSX Venture Exchange and other customary closing conditions. 

Transaction details

When the Transaction is finished, First Majestic will get 143,673,684 Golden Tag shares at a presumed worth of CDN$0.19 (US$0.14) each, having an overall worth of US$20.0 million and constituting roughly 40% of the existing shares in Golden Tag. First Majestic will get up to US$13.5 million in three milestone payments in either cash or shares in Golden Tag, with the share cost and the number of shares to be determined on the anniversary date. The Consideration Shares are subject to a six-month restriction period where 25% of the Consideration Shares will be vested bi-annually over 24 months. According to the Support Agreement, First Majestic will be committed to backing the Golden Tag board of directors and will be given an option to keep its number of stocks at a maximum of 19.9%. Additionally, First Majestic has consented to participate in a Golden Tag equity funding of up to CDN$9 million (US$6.59), with First Majestic’s contribution amounting to US$2.7 million.

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