Torys acted as counsel to Alamos Gold in its proposed sale of the Esperanza Gold Project in Mexico to Zacatecas Silver Corp.
On April 12, 2022, Alamos Gold Inc. (“Alamos”), through its subsidiary, Minas De Oro Nacional, S.A. De C.V. (“Minas De Oro”), completed the sale of the Esperanza Gold Project (“Esperanza” or the “Project”) located in Morelos State, Mexico to Zacatecas Silver Corp. (“Zacatecas”) for total consideration of up to US$60 million.
Under the terms of the agreement, Zacatecas acquired all the issued and outstanding shares of Esperanza Silver de Mexico, S.A. de C.V. (“Esperanza Mexico”), the entity which held title to the Project.
In consideration, the transaction involved
i.) US$21 million total consideration payable at closing, including:
US$5 million in cash;
US$10 million of Zacatecas shares (12.14 million common shares at a price of C$1.05); and
a silver metal stream valued at approximately US$6 million in which Alamos is entitled to receive 20% of the silver produced from Esperanza at a cash price of 20% of the prevailing spot silver price, subject to a maximum of 500,000 ounces.
ii.) US$39 million of additional consideration upon completion of the following milestones:
US$5 million within 60 days of Zacatecas receiving approval of the Environmental Impact Assessment Report for Esperanza;
US$14 million within 60 days of the earlier of (i) completion of a feasibility study on Esperanza, or (ii) Zacatecas announcing a construction decision on Esperanza; and
US$20 million within 180 days of commencement of commercial production from Esperanza.
Following the closing of the transaction, Alamos owns approximately 15% of Zacatecas’s outstanding common shares.
Further information can be found on Canada Newswire’s website.
The Esperanza Gold Project is an advanced stage, low technical risk growth project located in Morelos State, Mexico.
Alamos is a Canadian-based intermediate gold producer with diversified production from three operating mines in North America.
Zacatecas is a silver mining company that engages in the acquisition, exploration, and evaluation of silver properties. The Zacatecas Silver property is in Zacatecas State, Mexico, within the highly prospective Fresnillo Silver Belt, which has produced over 6.2 billion ounces of silver.
Torys acted as counsel to Alamos with a team that included Kevin Morris, Braden Jebson and Sebastian Gorlewski (corporate/M&A).
Torys also acted on the following in connection with this project: