McEwen Mining To Purchase Black Fox Complex For $35 Million
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(Kitco News) - McEwen Mining Inc. (NYSE, TSX: MUX) has reached an agreement to purchase Primero Mining Corp.’s (TSX: P; NYSE: PPP) Black Fox complex in Canada for $35 million, the companies announced Thursday.
McEwen Mining says it will assume both Black Fox’s assets and liabilities, with the purchase price subject to adjustments. Black Fox is located in the gold-mining camp of Timmins.
“Buying the Black Fox complex provides fantastic synergies with our recently acquired Timmins deposits,” said Rob McEwen, chairman and chief owner of McEwen Mining. “Our objective is to build a long-term production platform with a robust pipeline of production, development and exploration assets, all feeding into a single processing facility. This acquisition will add immediately to our gold production, but is just the beginning of a new chapter of growth for McEwen Mining.”
He added that Black Fox is expected to produce 50,000 to 60,000 ounces of gold in 2017.
Primero said it expects to use proceeds from the sale to reduce debt. The transaction is expected to close in the third quarter, Primero added.
“The proposed transaction for the divesture of Black Fox is consistent with our previously disclosed strategic review process to maximize value for shareholders,” said Joseph Conway, president and chief executive officer of Primero.
In its second-quarter earnings report released Thursday, Primero said Black Fox produced 20,731 ounces of gold in the second quarter, up from 15,172 ounces in the same period a year ago. All-in sustaining costs were $827 per ounce.
Primero Mining Corp. also owns the San Dimas gold-silver mine and the Cerro del Gallo gold-silver-copper development project in Mexico. McEwen Mining's other principal assets are a 49% interest in the San José mine in Argentina, the El Gallo gold mine and El Gallo silver project in Mexico, the Gold Bar project in Nevada, Timmins projects in Canada and the Los Azules copper project in Argentina.