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Thunder Bay’s Premier Gold Mines is acquiring a Mexican gold and silver mine in a US$140-million cash and share deal.

In what company president-CEO Ewan Downie called a “compelling and transformative transaction,” Premier announced July 28 that it has signed an agreement with Yamana Gold to acquire the Mercedes mine and exploration properties located in the state of Sonora in northwest Mexico. The acquisition closes on Sept. 30.

The deal consists of US$122.5 million cash, and the issuance of six million common shares and three million warrants to Yamana.

The mine, which has been in production since 2011, contains three underground gold-silver deposits. From 2012 to 2015, the mine produced an average of 109,000 ounces of gold annually and contains mineral reserves of 333,000 ounces of gold grading 4.33 grams per tonne (g/t) and 3 750,000 ounces of silver grading 48.8 g/t.

In its release, Premier said the mine is in an underexplored area that offers significant upside to add more mineral reserves to extend the mine’s life.

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