KOH hydrolyses the thiazole ethyl ester to a carboxylate; acidification gives the acid. Silver(I) then activates the neighbouring alkyne towards intramolecular six-membered O-cyclization. The carboxylate oxygen attacks the alkyne carbon farther from the thiazole, so the new ring follows carbonyl C–O–distal alkyne C–proximal alkyne C–thiazole C4–thiazole C5. A vinyl-silver intermediate is protonated to give the fused pyrone G.
The remote terminal carboxylic acid survives. Ester hydrolysis changes E's formula by to ; the subsequent addition across the alkyne changes connectivity without altering that formula. This distinguishes the lactonizing carboxyl group at thiazole C5 from the side-chain acid, which is not the group closing the observed fused ring.
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