By: Dylan Sikes - AllPennyStocks.com News

Monday, April 13, 2015

Precious metal miners are going through a challenging period. With the Federal Reserve in the U.S. ending its bond purchases last year, gold and silver prices have come under pressure. While gold prices have been nearly flat this year, silver prices are up more than 1%. In the past one year though, silver prices have fallen more than 17% and gold prices have fallen more than 8%. Importantly, the outlook for both the metals remains bearish. Gold and silver miners have been looking to adjust to the low-price environment by bringing down their costs. However, miners also need prices to stabilize.

All these factors mean that shares of silver and gold mining companies could remain volatile. One silver miner that has seen significant volatility and downward pressure on prices is Santacruz Silver Mining Ltd. (TSX-Venture:SCZ). Over the past six months, shares of this miner have fallen more than 60%. However, the stock has seen brief periods of gains in the past six months as well.

SCZ is based in Vancouver, Canada and is focused on Mexico where it has a producing mine and two advanced-stage projects and an early-stage exploration project. This morning, the miner announced that it has further amended its silver purchase agreement with JMET. Back in December 2014, SCZ had amended its $28.4 million agreement with JMET. Under the original agreement, which was signed in September 2014, SCZ was going to sell 4,635,000 ounces of silver through August 2019 to JMET. However, in the wake of volatility in precious metals and equities markets, the company decided to delay the construction decision on the San Felipe project until better market conditions exist.

The initial amendment reduced the contractual quantity of silver to be sold to JMET and the Company agreed to repay JMET a portion of the original silver prepayment amount. As part of the original agreement, SCZ received $28.4 million in upfront payment from JMET. Following the amendment though, the upfront payment amount was reduced to $12.4 million. SCZ had to return $16 million, $9 million of which the company repaid upon execution of the amended agreement. The balance $7 million was to be paid on April 1, 2015. The company though got some relief here.

SCZ said today that it repaid $2 million of the balance amount on April 1, 2015. The remaining amount can now be paid by the end of 2015. The amended agreement gives Santacruz Silver Mining significant financial flexibility during a challenging period.

Santacruz Silver Mining President Arturo Prestamo noted that with this additional financial flexibility and operations at Rosario now running smoothly and on track to be at 450 tpb by early May, the company has better positioned itself during difficult market environment.

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