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Excellon to acquire past producing La Negra silver-zinc-copper mine in Mexico for up to $50 million

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(Kitco News) - Excellon Resources (TSX: EXN) announced today that it has entered into a definitive acquisition agreement to acquire the permitted, past-producing La Negra Ag-Zn-Cu-Pb mine in Mexico for aggregate consideration of $50 million from an investment fund managed by Orion Resource Partners.

The company said that the aggregate consideration consists of upfront payments totaling $20 million, payable in common shares of the company, and a further $30 million of deferred, contingent consideration payable in common shares of the company or in cash at the company's option, following the restart of commercial production.

La Negra is a past producing mine with historical production averaging +3.0 million silver-equivalent ounces annually. A preliminary economic assessment (PEA) was completed for the project, with an effective date of March 31, 2022.

"The PEA concluded there was adequate detail and information to support a positive economic outcome and recommended restart of La Negra, particularly as this is a brownfields site with existing infrastructure, equipment, development, operating permits and labour force," the company noted in a statement.

According to a press release, brownfields site has permits to restart production, with existing infrastructure including a 3,000 tonne per day mill, mine development, camp facilities, all-season highway access and existing workforce.

The project has indicated mineral resources of approximately 15.1 million oz AgEq and inferred mineral resources of approximately 41.8 million oz AgEq, with significant exploration potential.

Excellon said that the project's PEA demonstrates a post-tax NPV5% of US$132.4 million, adding that the company is targeting a restart timeline of 12 to 18 months for La Negra.

Excellon is advancing a portfolio of silver, base metals and precious metals assets including 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.

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