Fortuna Mining selling non-core San Jose Mine, Mexico
Fortuna Mining Corp. [NYSE: FSM; TSX: FVI] has entered into a binding letter agreement to sell its 100% interest in Compa├▒ia Minera Cuzcatlan S.A. de C.V. to Minas del Balsas S.A. de C.V. (MDB), a private Mexican company.
Cuzcatlan is the owner of a 100% interest in the San Jose Mine in the state of Oaxaca, Mexico. Following the sale, Fortuna will cease to have any interest in the San Jose Mine, other than the net smelter return royalty described below. The San Jose Mine was scheduled to initiate a progressive closure process starting in early 2025.
Jorge A. Ganoza, President and CEO of Fortuna, commented, “Fortuna successfully built, expanded, and operated the underground San Jose mine for thirteen years, developing it into one of the 12 largest primary silver producers in the world for several years.” Ganoza added, “Today, San Jose is no longer a core asset in our portfolio, and we believe Minera del Balsas is well suited to continue extracting value, benefiting both employees and local stakeholders.” Ganoza concluded, “This transaction allows us to focus management’s efforts on higher value opportunities within our portfolio.”
Under the terms of the Letter Agreement, MDB will acquire all of the issued and outstanding shares of Cuzcatlan held by Fortuna’s subsidiaries for the aggregate consideration of: US$2 million payable on closing of the Transaction; a further US$2 million payable on the first anniversary of closing the Transaction; a final US$2 million payable on the second anniversary of closing the Transaction; and the right to receive up to approximately US$11 million upon the completion of certain conditions.
In addition, Fortuna will receive a 1.0% net smelter royalty on production from the San Jose Mine concessions, for a five-year term as of the start of production.
The completion of the transaction is subject to customary conditions of closing and is expected to be completed in the first quarter of 2025. INFOR Financial Inc. acted as financial advisor to Fortuna.
Fortuna Mining is a Canadian precious metals mining company with five operating mines in Argentina, Burkina Faso, C├┤te d’Ivoire, Mexico, and Peru, as well as the preliminary economic assessment stage Diamba Sud Gold Project located in Senegal.
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