VANCOUVER, Feb. 13, 2017 /CNW/ - Silver Standard Resources Inc. (NASDAQ: SSRI) (TSX: SSO) ("Silver Standard") announces that it has entered into a definitive agreement (the "Agreement") with Valor Resources Limited (ASX: VAL) ("Valor") to sell 100% of its Berenguela project in the Lampa Province of Puno, Peru ("Berenguela") for aggregate consideration of $12 million in deferred cash and a 9.9% equity interest in Valor. Valor is an Australian-based company, focused on mineral project exploration and development, listed on the ASX Limited (the "ASX").
Paul Benson, President and CEO of Silver Standard said, "The sale of the Berenguela project demonstrates our continued focus on maximizing the value of our projects and optimizing our portfolio. We retain exposure to the success of Berenguela, while we further strengthen our balance sheet for continued generation of shareholder value."
Under the terms of the Agreement, Silver Standard will sell its interest in Berenguela for aggregate consideration of:
- $50,000 non-refundable deposit paid on December 2, 2016;
- $100,000 deposit paid at signing of the Agreement;
- Escalating cash payments totaling $11.85 million to Silver Standard over five years, payable on each anniversary of the Agreement;
- A 9.9% equity stake, on a fully diluted basis, in Valor at closing, with a free-carry interest until Valor raises a minimum of $8.0 million in one or more financings; and
- 1.0% net smelter returns royalty on all mineral production from Berenguela.
Silver Standard also has an anti-dilution right in respect of subsequent financings by Valor, provided it holds at least five percent ownership, on a non-diluted basis, in Valor. Completion of the transaction is subject to customary closing conditions, including approval of Valor's shareholders and waivers from the ASX. Silver Standard expects the transaction to close at the end of the first quarter of 2017.
About Silver Standard
Silver Standard is a Canadian-based precious metals producer with three wholly-owned and operated mines, including the Marigold gold mine in Nevada, U.S., the Seabee Gold Operation in Saskatchewan, Canada and the Pirquitas silver mine in Jujuy Province, Argentina. We also have two feasibility stage projects and an extensive portfolio of exploration properties throughout North and South America. We are committed to delivering safe production through relentless emphasis on Operational Excellence. We are also focused on growing production and Mineral Reserves through the exploration and acquisition of assets for accretive growth, while maintaining financial strength.
