Sierra Madre Announces Agreement to Acquire the Del Toro Silver Mine from First Majestic Silver and Concurrent $50 Million Offering of Subscription Receipts

Core Viewpoint - Sierra Madre Gold and Silver Ltd. has announced the acquisition of the Del Toro Silver Mine from First Majestic Silver Corp. for up to US$60 million, marking a significant expansion of its portfolio in Mexico [1][2]. Transaction Overview - The acquisition includes a 100% interest in the 2,129-hectare Del Toro Property, which features three fully permitted underground mines and a flotation processing circuit with a capacity of 3,000 tonnes per day [2][9]. - The transaction is subject to approvals from the TSXV, Mexican Antitrust authorities, and disinterested shareholder approval [6][11]. Financial Details - The total consideration for the acquisition includes US$20 million in cash, US$10 million in Sierra Madre shares at closing, and additional contingent payments based on future milestones [9][18]. - A private placement offering of up to $50 million in subscription receipts is planned to fund the transaction and subsequent exploration activities [20][27]. Strategic Rationale - The acquisition aligns with Sierra Madre's business model of acquiring mines with existing production facilities and significant exploration potential [3][4]. - The Del Toro mine is expected to replicate the successful restart achieved at the La Guitarra mine, with plans to commence the mine restart process in mid-2027 and potential production by mid-2028 [3][4]. Exploration Plans - Initial exploration plans for Del Toro include a drill program of approximately 50,000 meters, leading to an updated Mineral Resource Estimate by early 2028 [4][9]. - High-priority exploration targets include Carbonate Replacement Deposits and skarn mineralization similar to nearby operations [4][16]. Historical Production Data - The Del Toro mine previously produced an average of 2.54 million ounces of silver equivalent annually from 2015 to 2018, with significant historical mineral resources identified [13][18]. - The site includes three underground mines with over 62.5 km of development and a fully operational processing plant [9][14].