Back to top

Image: Bigstock

Pan American, Brixton Metals Ink Asset Purchase & Sale Deal

Read MoreHide Full Article

Pan American Silver Corp. (PAAS - Free Report) entered into an asset purchase and sale deal with Brixton Metals Corporation. Under the pact, Brixton agreed to fully acquire the Hog Heaven mine from Pan American. Hog Heaven is a past-producing silver mine located in the State of Montana. The deal is subject to Pan American retaining a 3% net smelter returns royalty on the project.

Per the agreement, Brixton will issue common shares worth $1 million to Pan American upon the closure of the deal, with a deemed price of 37 cents per share on the basis of five trading day volume weighted average of its common shares traded on the TSX Venture Exchange.

Shares acquisition is subject to restrictions for resale for four months, from the date of closing. Also, no finder's fees are payable in relation to the deal. Pan American has agreed to issue notice to Brixton for any planned sale of the acquired shares for one year, giving Brixton the right to find a suitable buyer.

The deal is in sync with Brixton’s strategies for acquiring gold/silver assets situated in U.S. and Canada at reasonable low costs. On the basis of historical evidence, there are high chances of discovering new high grade silver zones and base metals on the site. Brixton’s initial task will be to digitize and compile past data for developing a 3D model and drill targets. Consequently, the company would establish a drilling campaign to expand identified silver-rich zones, new mineralized zones and convert the unspecified historic resource to satisfy CIM definitions for mineral resources. Historical estimates in the Hog Heaven Project Optimization Study indicate that the Hog Heaven has about 47.3 million ounces of silver and 225,800 ounces of gold.

The acquisition of the Hog Heaven Project is expected to complete after all standard closing conditions are satisfied, including the receipt by Pan American of the consent from a third party to the transfer of the project.

Pan American, which is one of the prominent silver mining companies along with Silver Standard Resources Inc , MAG Silver Corporation (MAG - Free Report) and Hecla Mining Company (HL - Free Report) , said last month that its operating performance in the first quarter has been mostly on track to attain its full-year’s guidance and reaffirmed current forecast on the basis of anticipated increase in gold production from Dolores expansion and a decrease at Manantial Espejo.

For 2017, Pan American anticipates silver production in the range of 24.5–26 million ounces and gold production in the range of 155,000–165,000 ounces for the current year. Cash costs are expected in the range of $6.45–$7.45 per ounce, while AISC is expected in the range of $11.5–$12.9 per ounce in 2017.

The Best & Worst of Zacks

Today you are invited to download the full, up-to-the-minute list of 220 Zacks Rank #1 "Strong Buys" free of charge. From 1988 through 2015 this list has averaged a stellar gain of +25% per year. Plus, you may download 220 Zacks Rank #5 "Strong Sells." Even though this list holds many stocks that seem to be solid, it has historically performed 6X worse than the market. See these critical buys and sells free >>
 

Published in