VANCOUVER (miningweekly.com) – TSX-V-listed junior Santacruz Silver Mining has sold its interest in the San Felipe project, in Sonora, Mexico, to a private domestic firm for $15-million.
Under the sale agreement, the buyer will complete the transaction in three tranches comprising $3-million to be paid by Friday; $12-million to be paid on or before December 19; and $2.4-million to be paid on or before February 15, 2017.
Santacruz advised that it will pay from the proceeds of the transaction about $10-million cash to a subsidiary of British miner Hochschild Mining (MHM), the underlying property vendor, and issue to MHM 13.41-million common shares of Santacruz as full and final payment for 100% of the San Felipe project, free of all encumbrances and the El Gachi property.
Upon closing, slated for December 19 pending finalising documentation and securities exchange approval, Santacruz will retain $5-million in cash and will own 100% of the El Gachi property. From these proceeds the company will pay about $2-million to settle outstanding third-party debt, with the rest earmarked for general working capital purposes.
"Our divestment of the San Felipe project is the result of an internal analysis that identified the property as being a noncore asset at this time in light of the opportunity that exists at the company's recently established operating base in Zacatecas, Mexico. This strategic decision will allow the company to further de-lever its balance sheet and accelerate our growth at the Veta Grande project located in one of Mexico´s most recognised silver districts," stated president and CEO Arturo Prestamo.
He added that the company’s focus in 2017 will be to further optimise the operations at Santacruz’s two producing mines, with the goal of increasing production levels and reducing costs.