Excellon Resources Inc (TSX:EXN, OTCQB:EXNRF) announced that it has finalized an agreement to acquire Minera CRC SAC, the owner of the past-producing Mallay Silver Mine and the Tres Cerros exploration property in Peru.
This deal, reached with Adar Mining Corp and Premier Silver Corp, ensures Excellon will take full ownership of Minera CRC through a court-supervised process designed to resolve prior disputes.
The Mallay Mine, previously operated by Buenaventura from 2012 to 2018, has seen US$115 million in past investment and produced an average of 1.3 million ounces of silver annually during its peak years. The mine went into care and maintenance in 2018 due to low silver prices at the time.
"Today's announcement provides certainty in our acquisition of the past-producing Mallay Mine, previously operated by Buenaventura,” Excellon CEO Shawn Howarth said in a statement.
“We are executing on an aggressive plan to return to silver production at Mallay in Q4 2025 and this agreement ensures an expedited closing with the full support of all stakeholders, allowing us to focus on unlocking value from the property."
The company will immediately begin the restart process upon closing of the agreement with the goal of returning Excellon to producer status swiftly, the CEO added.
"An operational team is already in place in Peru, Mallay is fully permitted and our plan leverages the historic US$115 million invested in mill and surface infrastructure and kilometres of underground mine development,” Howarth said.
Updating resource model
Excellon is updating the Mallay Mine's historic resource model to account for improved silver and base metal prices. The company is also preparing an update on surface prospecting at the Tres Cerros gold-silver project, located near the Mallay Mine.
Further, Excellon is in discussions with potential offtake partners and equity financiers to secure funding through equity and other non-dilutive options.
Per the terms of the agreement, Premier Silver will sell 100% of Minera CRC’s shares to Excellon, with closing expected in April 2025. Excellon will pay C$400,000 in shares to Premier Silver.
Additionally, Excellon agreed to increase its cash payment to Adar to US$1.565 million and extend the closing deadline to April 29, 2025, with further extension options available for additional fees.
US-listed shares of Excellon gained 10.9% over the counter to reach US$0.09 by midmorning.