Great Panther Silver Ltd. struck a deal to acquire the Coricancha gold-silver-lead-zinc-copper mine and mill complex from Nyrstar NV subsidiary Nyrstar Coricancha SA.
Earlier in May, Great Panther terminated an option agreement over the Coricancha gold-silver-zinc mine and started evaluations to negotiate an acquisition deal.
To acquire the assets, Great Panther will pay US$100,000 upon closing, an amount equal to cash on hand in Coricancha, and an earn-out consideration of up to US$10 million. Under the earn-out, Nyrstar will be entitled to 15% of the free cash flow generated by the project during the five-year period, after which the mine is free cash flow positive.
The deal is expected to close in the first quarter of 2017.
Great Panther President and CEO Robert Archer said the project has the potential for annual production of approximately 3 million silver equivalent ounces and that the company is fully financed to bring the mine back into production with more than US$54 million in cash.
Coricancha is a fully permitted polymetallic mine that includes an operational 600-tonne-per-day flotation and gold bio-leach plant along with supporting mining infrastructure.
The mine has been on care and maintenance since August 2013 when it was closed due to falling commodity prices.