In a news release, McEwen said the transaction fits in with additional acquisitions the company has made in the Timmins camp.
McEwen acquired Lexam VG Gold in April. Lexam, which now operates as a subsidiary of McEwen, counts amongst its properties Buffalo Ankerite, Fuller and Davidson, along with a 61 per cent interest in the mineral rights on the Paymaster property (the remaining 39 per cent is controlled by Goldcorp).
“Our objective is to build a long-term production platform with a robust pipeline of production, development and exploration assets, all feeding into a single processing facility,” Rob McEwen, chair and chief owner, said in the release.
“This acquisition will add immediately to our gold production, but is just the beginning of a new chapter of growth for McEwen Mining.”
“Black Fox comes with a talented operating team, an underground mine producing 50,000 to 60,000 ounces of gold in 2017, a processing facility with excess capacity, two future development opportunities, and excellent exploration potential,” he added. “Combined with our existing portfolio of Timmins deposits, I believe this is a logical and potent combination.”
In its own release, Primero said it would use the proceeds from the transaction to pay off company debt. The sale is expected to be completed in the third quarter of 2017.
"The proposed transaction for the divestiture of Black Fox is consistent with our previously disclosed strategic review process to maximize value for shareholders," Primero president-CEO Joseph Conway said.
"I would like to thank everyone at Black Fox for their commitment and dedication, and we wish them continued success as part of the McEwen team. We will continue to advance definitive documentation and work closely with the team at site to ensure a smooth transition."
McEwen Mining has additional assets in Argentina, Mexico, and Nevada.