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Mexico-focused Guanajuato Silver (TSXV: GSVR) said on Thursday it has triggered the last remaining payment owed to Endeavour Silver (NYSE: EXK) (TSX: EDR) as part of its $15 million acquisition of the El Cubo mine and mill complex.
As set out in the 2021 purchase agreement, a contingent payment of $1 million would be owed to Endeavour once the the El Cubo mill produces 3 million ounces of silver-equivalent, a milestone that has now been reached.
Under the agreement, Guanajuato has the right to settle half of this payment through the issuance of approximately 2.75 million common shares at a price of C$0.245 per share — the 10-day VWAP (volume-weighted average price) of the shares 30 days after the milestone was reached.
On Thursday, the company announced it has agreed to settle the balance of this payment through the issuance of approximately 2.72 million common shares at a deemed price of C$0.25 per share, the stock’s market price at press time. The Vancouver-based miner has a market capitalization of C$106 million.
Separately, Guanajuato has also agreed to issue shares to metals trading firm Ocean Partners to settle two months of outstanding payments on an existing credit facility. Ocean Partners will receive approximately 9.77 million shares for total consideration of $1.8 million.
“Ocean Partners has been our preferred metals trader from inception; and we are pleased that they are now one of our larger shareholders with approximately 4.9% of all shares outstanding,” Guanajuato Silver CEO James Anderson said in a news release.
Furthermore, the company has also arranged to settle approximately $250,000 in outstanding liabilities by issuing approximately 1.36 million common shares to an arm’s length third party.
Following the debt settlements, the Ocean Partners credit facility will be Guanajuato’s only remaining outstanding loan and is repayable in equal fixed monthly installments of gold totalling approximately 338 ounces per month for a period of 30 months, which commenced in June 2024.
In addition to El Cubo, Guanajuato operates two other mines in Mexico: the Valenciana Complex and San Ignacio. Together, these operations produced 3.5 million oz. of silver-equivalent last year, a record high for the company.
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