Excellon Resources (TSX: EXN) appears to be falling apart at the seams, with the company revealing late last night that the previously announced arrangement to acquire the past-producing La Negra Mine in Mexico had fallen apart.
The deal to purchase the mine was reportedly terminated by the seller, an entity owned by an Orion Resource Partners managed fund, with a reason for the termination not provided. Excellon was reportedly in discussions with respect to options to move the transaction to closing.
La Negra is a past-producing silver-zinc-copper-lead mine, which featured annual production of over 3.0 million silver-equivalent ounces historically. Permits to restart production were on hand, with infrastructure in place including a 3,000 tpd mill, camp facilities, an existing workforce, and all-season access.
The property was to be acquired for US$50 million, including US$20 million which was to be paid upfront in common shares and a further US$30 million of deferred contingent consideration that was to be payable in cash or shares. The company had expected to get the mine operational within 12 to 18 months post-closing, with the transaction expected initially to have closed by April 15, 2023.
READ: Excellon Resources Fails To Meet Listing Standards For NYSE
However, Excellon was unable to raise US$10 million under a related financing, which was to be used to fund development activities for the restart of the mine.
With the termination of the acquisition of La Negra, Excellon has now cancelled that ongoing financing. What’s more, the company is now in discussions with holders of C$17.9 million in debentures to rework the maturity date of the debt. The debt is currently set to come due on July 30, although the company currently has no means to pay it, reporting just US$466,000 in cash as of March 31.
The company is said to be currently reviewing its strategic options related to the debt and its go-forward strategy now that the transaction for La Negra has fallen through.
Separately, two directors of Excellon resigned from the firms board yesterday following the failures experienced by the company.
Excellon Resources last traded at $0.215 on the TSX.
Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
One Response
Can you provide more details about the current financial status of Excellon Resources, including their cash position as of March 31?
Is there any information on the future prospects or plans of Excellon Resources after the failed acquisition and the financial challenges they are facing?