The Federal Commission of Economic Competition (Cofece) of Mexico approved the purchase of the La Preciosa silver project from the company Coeur Mining by Avino Silver & Gold Mines.
The La Preciosa exploration-stage silver project, owned by Coeur’s subsidiary La Preciosa Silver Corp., is located approximately 85 kilometers northeast of the city of Durango.
First of all, on October 27, 2021, Coeur entered into a definitive agreement to sell its La Preciosa project to Avino.
Pursuant to that agreement, Avino will acquire the La Preciosa project for the following consideration:
- $15.0 million at the closing of the transaction.
- $5.0 million promissory note due prior to the first anniversary of the closing of the transaction.
- Capital consideration of 14.0 million units, payable at closing, each consisting of one Avino common share and one-half of an Avino common share purchase warrant, priced at a 25% premium over the 20-day volume-weighted average price prior to announcement.
- Deferred cash consideration of approximately $8.8 million to be paid no later than the first anniversary of initial production of any part of the La Preciosa project.
- Contingent payments of $0.25 per silver equivalent ounce (subject to an inflation adjustment) on any new mineral reserves discovered and declared outside the current resource area at the La Preciosa project, up to a maximum payment of $50.0 million.
- Two royalties covering the La Preciosa land package, including a 1.25% net smelter return royalty on properties covering the Gloria and Abundancia areas of the La Preciosa project, and a 2.0% gross value royalty on all La Proyecto Preciosa project areas other than the Gloria and Abundancia areas, offset by the amount of any contingent new mineral reserve payment made to Coeur.
On January 20, 2022, Coeur Mining; La Preciosa Silver & Gold Mines Ltd; La Luna Silver & Gold Mines and Avino Silver & Gold Mines Ltd. notified Cofece of their intention to hold a merger.