Silver Standard Resources Inc. (Nasdaq: SSRI) announces that it has entered into a definitive agreement with Argonaut Gold Inc. to sell 100% of its San Agustin project in Durango, Mexico for an aggregate consideration of approximately $75 million. Argonaut is a U.S.-based company listed on the Toronto Stock Exchange.
“This transaction demonstrates the value within our portfolio beyond our mine and development projects,” said John Smith, President and CEO. “Selling San Agustin adds to our balance sheet strength for funding future growth. We continue to focus on optimizing our business to deliver long-term, sustainable shareholder return.”
Under the terms of the definitive agreement, Silver Standard will sell its interest in San Agustin for aggregate consideration of:
* $15 million cash payable at closing;
* $30 million of Argonaut shares issued at closing (based on the 5-day volume weighted average sale price for Argonaut shares trading on the TSX prior to signing the definitive agreement);
* $10 million cash payable six months after signing the definitive agreement; and
* $20 million cash payable eighteen months after signing the definitive agreement.
Silver Standard will also have a 2.0% NSR royalty on sulphide ore produced from San Agustin.
Completion of the transaction is subject to customary closing conditions, including receipt of required regulatory and TSX approvals. Silver Standard expects the transaction to close in the first quarter of 2014.