Mako Mining (TSXV: MKO) has unveiled plans to acquire full ownership of the Moss gold mine in Arizona from EG Acquisition, a company established by Wexford Capital, Mako’s primary shareholder. This strategic move comes after Elevation Gold Mining, the previous owner of the Moss mine, filed for creditor protection in August 2024, citing an unsustainable debt load and ongoing financial struggles.
The purchase price for the asset is in the range of $4.9 million to $6.4 million in cash, with the final figure contingent on the resolution of disputes surrounding a net smelter return royalty tied to the mine, according to Mako Mining. The company added that if these royalties are resolved in favor of Mako, the firm has agreed, through its wholly owned subsidiary EGA, to pay an additional $1.5 million to Elevation Gold’s creditors. The status of these royalties is expected to be clarified by the first half of 2025, providing clarity for the financial terms of the deal.
Mako sees the acquisition as a valuable addition to its portfolio, particularly as it enables the company to expand its presence in a top-tier mining jurisdiction. The deal is expected to be financed entirely through cash flow generated from Mako’s ongoing mining operations, specifically from its recent production activities in the previous quarter. This acquisition will give Mako control of a producing asset with significant potential for further optimization and growth.
Despite Elevation Gold’s financial troubles, the Moss mine has continued its gold production during the bankruptcy proceedings, utilizing its beneficiation facilities. Mako Mining has outlined plans to restart mining operations promptly after completing a thorough review of the mine’s operational plans. The company aims to optimize the mine’s processes, including addressing bottlenecks in the crushing plant, which have limited production efficiency.
The Moss gold mine, located in the mining-friendly state of Arizona, is an established asset with ongoing production, making it an attractive opportunity for Mako as it seeks to grow its operations in North America. Mako Mining has emphasized that the acquisition aligns with its strategic objectives of expanding its asset base in key jurisdictions while generating growth from cash flow produced by its existing operations.
In a broader context, the Moss acquisition follows Mako’s recent expansion into South America. In March 2024, Mako Mining acquired Goldsource Mines (TSXV: GXS), gaining control of its flagship Eagle Mountain gold project in Guyana. This move marked the company’s first step into South America, diversifying its asset base and offering future growth opportunities in the region.
Additionally, Mako operates the San Albino gold mine in northern Nicaragua, a high-grade operation that has been central to the company’s growth strategy in recent years. The combination of operations in Nicaragua, Guyana, and now Arizona, positions Mako as a more diversified and geographically expansive player in the global gold mining industry.
With the Moss mine acquisition, Mako Mining is well-positioned to further strengthen its presence in the gold sector, particularly in North America, while continuing to explore growth opportunities in other regions. The company’s approach of funding acquisitions from its own cash flow highlights a disciplined financial strategy aimed at ensuring long-term sustainability and value creation for shareholders.
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