Great Panther Mining (US-OTC: GPLDK) and Newrange Gold (TSXV: NRG) have called off a planned share purchase agreement that would have seen Newrange take full control of the Coricancha gold-silver-lead-zinc-copper mine in Peru.
The initial agreement announced on Oct. 26 outlined a plan for cash-strapped Great Panther to sell its Peruvian subsidiaries, Great Panther Silver Peru SAC and Great Panther Coricancha SAC to Newrange for US$750,000. Completion of the deal was subject to closing conditions including approval by the TSX Venture Exchange and evidence of sufficient financing.
Robert Archer, president and CEO of Newrange, said they were deeply disappointed to have arrived at this outcome.
“We have been working on this acquisition since March and believe strongly in the potential of the Coricancha mine,” he said. “However, the current market for mining stocks, one of the worst in decades, has created a serious impediment to financing, especially for new acquisitions.”
“While we attempted to gain an extension to the closing date,” Archer added, “the intransigence of Great Panther’s creditors has, regrettably, made that impossible.”
Newrange served notice that it would not move forward on proposed financing, share consolidation, and a name change associated with the deal. The company anticipates that trading of its shares will resume in a few days. Newrange is currently focused on district-scale exploration of precious metals in northwestern Ontario’s Red Lake district.
The cancellation of the Coricancha mine sale comes at the tail end of a difficult year for Great Panther. In August, the Vancouver-based firm sold off its assets in Mexico to Guanajuato Silver for a cash-and-stock deal worth US$14.7 million. But by Sept. 4, Great Panther revealed it had filed for creditor protection, prompting a delisting review with both the Toronto and New York Stock Exchanges.
On Nov. 22, the B.C. Securities Commission announced it had issued a ‘failure to file’ cease trade order to Great Panther because of the firm’s inability to submit interim financial results for the latest quarter. A few weeks earlier, the company announced the start of a court-approved sales and investment solicitation process involving it and its Brazilian subsidiary Mina Tucano. The company’s Tucano operation, in Amapa state, was placed on care and maintenance in September, but it continued to process stockpiled ore.
Coricancha, situated in the central Andes of Peru about 90 km from Lima, is a polymetallic mine with a 600-tonne-per-day processing plant and ancillary infrastructure. However, production at the site was suspended by a previous operator in 2013. Great Panther acquired Coricancha in June 2017, and the mine has remained in care and maintenance mode since.