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Mako Mining Set To Acquire The Moss Mine For Up To US$6.4 Million

Mako Mining (TSXV: MKO) is adding a third asset to its portfolio. The firm this morning announced that it has signed a non-binding letter of intent to acquire the Arizona-based Moss Mine from EG Acquisition, a company established by Mako’s controlling shareholder, Wexford Capital.

The transaction appears to be multi-step in nature, with Wexford first set to acquire the Moss Mine by the close of business on December 31, 2024, which will be conducted via the acquisition of Golden Vertex Corp. The asset is being picked up from creditor protection, following the former owner of the asset, Elevation Gold, entering CCAA proceedings back in July as a result of a high cost of protection and debt issues.

Under the terms of the transaction, Mako is set to pay between US$4.9 and US$6.4 million for the asset, with the final price to be dependent on whether certain royalties are extinguished as part of the bankruptcy process in the US. The process is expected to result in the extinguishment of over US$60 million in debt, along with a silver stream for 100% of payable silver that existed on the property.

Two applicable royalties on the property are meanwhile being disputed. If these royalties are vested away, Mako has agreed to pay up to an additional US$1.5 million for the creditors. The status of the royalties is expected to be determined in the first half of 2025.

READ: Mako Mining Closes On $33 Million All Stock Purchase Of Goldsource Mines

Upon closing, the acquisition of the Moss Mine will make Mako a multi-asset producer. The Moss Mine has been producing gold throughout the ongoing bankruptcy process via its beneficiation facilities, although mining activity has been suspended. Mako has indicated it intends to restart mining on site upon an optimization of the mining plan and debottlenecking of the crushing plant, which is expected to take several months upon closing of the transaction.

The purchase is said to be funded via cash flow from Mako’s current mining operations, while a bond that exists on the Moss Mine will be reduced from $3.0 million to $1.5 million, reducing the net cash acquisition cost for Mako.

“The acquisition of the producing Moss gold mine in Arizona, after the elimination of over US$ 60 million of existing liabilities associated with the mine, for a base purchase price of US$ 4.9 million, further reduced by US$ 1.5 million through the release of certain collateral, funded out of a fraction of this quarter’s corporate cash generation, is a testament to the powerful platform Mako has at its disposal,” commented Akiba Leisman, CEO of Mako, on the transaction.

The Moss Mine in 2023 produced 31,047 ounces of gold at 0.47 g/t, and a further 202,060 ounces of silver at 6.8 g/t. While full financial results are not available for 2023, financial results from Elevation Gold indicate that Q1 saw 6,303 ounces of gold produced at a cash cost of $1,598 per ounce.

READ: Mako Mining Q3: Earnings Bad, Overall Story Good

The proposed transaction is currently expected to close by February 2025, subject to a definitive agreement being entered into between Wexford Capital and Mako Mining.

Mako Mining last traded at $2.80 on the TSX Venture.


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.

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