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Great Panther Mining shares tick higher as it secures off-take deal with IXM Group

The firm's subsidiary, which operates its Mexico mines, has entered into a US$10 million concentrate prepayment agreement with the IXM Group.

Great Panther Mining Limited -
Great Panther operates three mines including the Tucano gold mine in Amapá State, Brazil, and two primary silver mines in Mexico

Shares in precious metals producer Great Panther Mining Ltd (NYSEAMERICAN:GPL) (TSE:GPR) ticked higher as it revealed it had  secured an off-take deal with IXM Group - one of the world's largest metal traders.

The firm's subsidiary, which operates its Mexico mines, has entered into a US$10 million concentrate prepayment agreement with the IXM Group.

READ: Great Panther operates three mines including the Tucano gold mine in Amapá State, Brazil, and two primary silver mines in Mexico

"We are pleased to be partnering with IXM in Mexico for our GMC concentrates over the next two years," stated Jeffrey Mason, the interim president and CEO of Great Panther.

"Securing the sale of this off-take at competitive market terms, while strengthening our balance sheet with US$10 million at an attractive cost of capital, positions us well to achieve our strategic objectives as we move into 2020."

The offtake is for 100% of the gold-silver concentrates produced from the group's Guanajuato Mine Complex (GMC) in 2020 and 2021 and in consideration, IXM will advance a US$10 million prepayment on December 30 (today).

The pre-payment will be repaid on December 31, 2020 and will bear interest at an annual rate of 3-month US dollar LIBOR plus 5%.

No hedging

Great Panther has issued a guarantee to IXM with respect to the prepayment. There is no hedging of the price of gold or silver associated with the off-take or prepayment agreement.

Great Panther operates three mines including the Tucano gold mine in Amapá State, Brazil, and two primary silver mines in Mexico.

These are the Guanajuato Mine Complex and the Topia mine. The company also owns the Coricancha Mine in Peru where, in 2019, it executed a successful bulk sample mining program in accordance with the May 2018 preliminary economic assessment (PEA).

Great Panther shares added 2.34% to US$0.51 in New York and 1.52% in Toronto to stand at C$0.67 each.

Quick facts: Great Panther Mining Limited

Price: 0.73 CAD

TSX:GPR
Market: TSX
Market Cap: $257.43 m
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