Silver Standard Resources Inc. (NASDAQ: SSRI) (TSX: SSO) announces that it has entered into a definitive agreement with Huayra Minerals Corporation to advance its Diablillos and M-18 projects, located in Argentina. Silver Standard will maintain a 19.9% equity interest in Huayra and nominate one member to the Board of Directors of Huayra.
Paul Benson, President and CEO of Silver Standard said, "This transaction demonstrates our continued focus on maximizing the value of our portfolio of projects by partnering with an Argentina-focused company who can accelerate exploration and development at Diablillos and M-18. The transaction allows Silver Standard to support the success of Huayra and the advancement of the projects."
Huayra is a company focused on exploration and development in Argentina. Huayra has entered into a binding letter of intent with Angel Bioventures Inc. (TSX.V: DDD.H) to complete a reverse takeover transaction ("RTO"). If the RTO is completed, the resulting company (the "Resulting Issuer") is expected to be listed on the TSX Venture Exchange. Pursuant to the Agreement, if the RTO is completed, the Resulting Issuer is required to enter into an agreement with Silver Standard under which it will be bound by the terms of the Agreement and will assume all of Huayra's obligations under the Agreement.
Under the terms of the Agreement, Silver Standard will be eligible to receive:
- A 19.9% equity stake in Huayra, with free carried interest until the completion of a public offering of $5.0 million or more (the "Public Offering");
- The right to nominate one member to the Board of Directors of Huayra for up to three years after the closing date, provided that Silver Standard continues to hold more than ten percent of the then issued and outstanding shares of Huayra on a non-diluted basis;
- The right to participate in future equity financings after the Public Offering to maintain its ownership level in Huayra for as long as Silver Standard continues to hold more than ten percent of the then issued and outstanding shares of Huayra on a non-diluted basis;
- Cash payments to Silver Standard of approximately $1.5 million over the first two years and $12.5 million over the following three to five years; and
- 1.0% net smelter returns royalty on production from each of the Projects.
Completion of the transaction is subject to customary closing conditions. Silver Standard expects the transaction to close in November 2016.
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.
About Huayra Minerals Corporation
Huayra is a mineral exploration and development company engaged in the acquisition, exploration and development of mineral resource properties in Argentina. Huayra has rights in the Cerro Amarillo property in the Province of Mendoza, Argentina and the Samenta property in the Province of Salta, Argentina.
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