Orion in sale of La Negra Mine

On January 9, 2023, Excellon Resources Inc. ("Excellon") announced that it entered into a definitive acquisition agreement to acquire the permitted, past-producing La Negra Mine ("La Negra") located in Querétaro State, Mexico from Dalu S. à r.l. ("Dalu"), an entity owned by an investment fund managed by Orion Resource Partners ("Orion") for an aggregate consideration of US$50 million. The consideration will be delivered through upfront payments totalling US$20 million and a further US$30 million of deferred, contingent consideration following the restart of commercial production at the La Negra Mine.

Under the terms of the acquisition agreement,  Excellon agreed to acquire all of the issued and outstanding shares of Minera La Negra, S.A de C.V. ("MLN") owned by Dalu, the Mexican company that holds title to La Negra. Of the total consideration, 60% will be paid to Dalu in respect of the acquisition of all of the outstanding shares of MLN, and 40% will be paid to Grupo Desarrollador Migo, S.A.P.I. de C.V. ("M Grupo") in satisfaction of the termination of existing joint venture arrangements regarding La Negra. Upon closing of the acquisition, Excellon will issue an aggregate of 56,191,666 common shares (33,715,000 to Dalu and 22,476,666 to subsidiary of M Grupo) for a deemed value of US$20 million.

In addition, Excellon agreed that it will pay an aggregate deferred, consideration of US$30 million to Dalu and M Grupo, a local partner, in two tranches

1. US$15 million within 3 days after declaration of commercial production at the La Negra Mine; and
2. US$15 million within 12 months after declaration of commercial production at the La Negra Mine.

Of the deferred consideration payments, 60% of such payments will be made to Dalu and 40% to M Grupo. The agreement provides that commercial production at the La Negra Mine will be achieved upon the restart of the mine and the associated plant and the production of saleable concentrate for three consecutive months at 75% of the nameplate capacity of the plant.

Excellon may, at its sole election, satisfy either or both deferred consideration payments in cash, or by issuing shares of Excellon at a price equal to the 20-day volume-weighted average trading price for the shares on the Toronto Stock Exchange ending on the day prior to the issuance of such shares.

Further information on the announcement can be found on Canada Newswire’s website.

Excellon is a mining and exploration company advancing a portfolio of silver, base metals and precious metals assets. Its assets include Kilgore, an advanced gold exploration project in Idaho; and Silver City, a high-grade epithermal silver district in Saxony, Germany with 750 years of mining history and no modern exploration.

M Grupo is a Querétaro-based infrastructure company. It has business interests in real estate, infrastructure construction and in mining, through La Negra.

Orion Mine Finance Group is one of the world's leading mining-focused private equity businesses.