Gold mining, development and exploration company Mako Mining has signed a nonbinding letter of intent to acquire a 100% stake in EG Acquisition (EGA).
EGA, a company under the control of Mako's main shareholder Wexford Capital, recently acquired certain assets, including all outstanding common shares of Golden Vertex Corp. (GVC) from Elevation Gold Mining.
The latest acquisition includes the entirety of GVC, which directly owns the Moss mine located in Mohave County in north-western Arizona, US.
The proposed transaction is expected to cost between $4.9m and $6.4m, depending on the removal of certain royalties, with the entire amount payable in cash.
The transaction is anticipated to close by February 2025.
EGA's acquisition of GVC is part of a court-approved sale process under bankruptcy laws, which has seen over $60m of liabilities related to the Moss Mine cleared.
The elimination of a silver stream and the dispute over remaining royalties could see Mako's subsidiary EGA pay an additional $1.5m to creditors.
In July 2024, Elevation Gold secured an initial order from the Supreme Court of British Columbia under the Companies’ Creditors Arrangement Act to protect itself from creditors.
Mako CEO Akiba Leisman said: “The acquisition of the producing Moss gold mine in Arizona, after the elimination of over $60m of existing liabilities associated with the mine, for a base purchase price of $4.9m, further reduced by $1.5m through the release of certain collateral, funded out of a fraction of this quarter’s corporate cash generation, is a testament to the powerful platform Mako has at its disposal.
“The Moss mine is central to the large-scale historic Oatman Mining district, and we will be looking to expand our opportunities, especially with the new mining-friendly US administration about to take office next month.”
Mako Mining and EGA have now agreed to negotiate a definitive agreement and have entered into exclusive negotiations until 31 March 2025.
The Moss Mine, an open-pit heap leach operation in the Oatman District, is currently operating at limited capacity due to the bankruptcy process.
It is expected to resume full mining operations shortly after the transaction's completion.
Mako operates the San Albino Mine in Nicaragua and owns the Eagle Mountain project in Guyana.
