GOLDEN TAG TO ACQUIRE LA PARRILLA SILVER MINE COMPLEX FROM FIRST MAJESTIC SILVER
Toronto, Ontario, December 7, 2022: Golden Tag Resources Ltd. (“Golden Tag” or the "Company") (TSX.V: GOG) (OTCQB: GTAGF) is pleased to announce that the Company has entered into a definitive Asset Purchase Agreement dated December 7, 2022 (the "Purchase Agreement" or “APA”) with First Majestic Silver Corp (“First Majestic” or “FMS”) to acquire a 100% interest in the 69,478 hectares La Parrilla Silver Mine Complex (“La Parrilla”) in the locality of San Jose de la Parrilla, Durango, Mexico (the “Transaction”).
Highlights:
La Parrilla is a fully permitted former producing mine complex consisting of five underground high-grade silver mines, and an open pit
Demonstrated history of replacing resources – operated continuously from 2004 until September 2019 when it was placed on care and maintenance due to low silver prices
Under FMS ownership the mill produced 34.3 million (“M”) ounces1 of (“oz”) silver equivalent (“Ag.Eq”), with average annual production of approximately 3.1 M oz of Ag.Eq1, 2
Excellent infrastructure inclusive of a 2,000 tonne per day (“tpd”) processing facility (1,000 tpd flotation and 1,000 tpd cyanidation circuits), dry stack filter plant with approximately 9 years3 of tailings capacity available, numerous buildings including a doré refinery, and a partial underground mining fleet4New labour and Ejido agreements in place
Historical Measured and Indicated Mineral Resources of approximately 9.95 M oz Ag.Eq and Inferred Mineral Resources of approximately 12.51 M oz Ag.Eq5, 6 (see Table 2)
Located only 45 minutes from Durango City, paved highway to site
Large underexplored land package totaling 69,478 ha
Debt-free transaction with upfront consideration of US$20M in equity, and deferred payments totaling US$13.5M for a total acquisition price of US$33.5M
Requirement to raise a minimum of CAD$9M in equity concurrent with the acquisition, with participation of US$2.7M from First Majestic
Support received from key existing shareholders representing 54 million shares
First Majestic to become strategic and largest shareholder of Golden Tag, inclusive of standard support agreements in place until May 2024
Greg McKenzie, President & CEO commented “We are honoured to partner with First Majestic in the acquisition of La Parrilla, their first producing silver mine, which has produced 34.3 million oz of Ag.Eq of Ag.Eq under their ownership. Over the past two years we have evaluated several opportunities for growth in the silver space and La Parrilla is a great opportunity. The mine complex is fully permitted, located only 45 minutes on paved roads from Durango and, only a few hours from our existing San Diego project.
This is a transformative acquisition for Golden Tag and we strongly believe in the upside resource growth potential of this long-life prolific asset. Our short-term objective is to commence exploration within and near mine workings in order to expand the resource base, to support our ultimate goal & vision of placing the asset back into production.
We would like to thank our key shareholders for their support on this transaction and look forward to working with First Majestic to complete the acquisition.”