Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Mexican-focused silver producer, Scorpio Mining (TSX: SPM), merged with U.S. Silver & Gold (TSX: USA) to create a silver producer focused on the Americas and better survive low precious metal prices.
The entity will stay under the name Scorpio Mining. The new junior silver miner will have two established producing mines, a third mine in development, an advanced stage exploration project, and pro forma net working capital of approximately C$40 million.
Scorpio Mining’s stock was halted today pending announcement of the news.
“This merger creates a stronger, better positioned company that is capable of not only surviving the current low silver price environment, but potentially transitioning from a junior precious metals company to an intermediate producer over the next couple of years,” stated Darren Blasutti, President and Chief Executive Officer of U.S. Silver & Gold, in a statement.
Management believes a larger company will be able to realize efficiencies and save the combined company approximately C$2.0 – C$3.0 million per annum.
The news release stated that merging the companies will “. . . create a leading junior silver producer in the Americas.”
2 Comments
Sven
Will Mexico stay a safe jurisdiction for miners as the door to the President’s “ceremonial” Palace burns?
Ivan Fed
The mex govt. is always friendly to all-who have $$$$ and power! Ask any paid political or drug cartel member.Yep, your monies are welcomed here but first we must take care of student protesters…. SHAME!!!!!!