Torex Gold Resources will buy Prime Mining in an approximately $449-million all-share transaction, the companies announced July 28. The deal will add Prime’s Los Reyes gold-silver project in Mexico to Torex’s expanding portfolio of assets across Mexico. 

Under the terms of the agreement, Prime Mining shareholders will receive 0.06 Torex shares for each Prime share they own. This exchange ratio represents an 18.5 per cent premium to Prime’s most recent closing price and a 32.4 per cent premium to its 30-day volume-weighted average. Upon completion of the transaction, Prime shareholders will own approximately 10.7 per cent of the combined company. 

The companies expect to finalize the deal late this year, subject to shareholder, court, and regulatory approvals, including Mexican antitrust clearance. 

Prime’s Los Reyes project is 43 kilometres southeast of Cosalá in Mexico’s Sinaloa state, encompassing a contiguous land package of 6,273 hectares. It is situated within the Guadalupe De Los Reyes mining district, known for its significant mining activity dating back to the 1700s. 

The indicated mineral resources for the Los Reyes project is 49.0 million tonnes grading 0.95 grams per tonne of gold, containing approximately 1.49 million ounces of gold, and 34.2 grams per tonne of silver, containing approximately 54 million ounces of silver.  

“The Los Reyes Project represents a unique opportunity for the Torex team to develop a high-quality asset with the potential for a high margin, low capital, and long-life operation in a jurisdiction that we know very well,” said Jody Kuzenko, president and CEO of Torex, in a July 28 press release. 

The deal comes on the heels of Torex’s late-June, $36 million-acquisition of Vancouver-headquartered junior Reyna Silver, which allowed the company to scoop up Reyna’s exploration projects, including the Batopilas and Guigui silver projects in Mexico. 

Kuzenko said both acquisitions support the company’s strategy to “systematically build a diversified, Americas-focused precious metals producer with a portfolio of producing, development and exploration stage assets.” 

Torex currently has several operations in Mexico. The company is focused on the exploration, development, and operation of its Morelos Property in Mexico, which comprises the El Limón Guajes and Media Luna mines. Covering 29,000 hectares, the property is situated in the Guerrero gold belt, roughly 180 kilometres southwest of Mexico City.