Santacruz Silver Mining Announces Sale Of San Felipe Project

Santacruz Silver Mining Announces Sale Of San Felipe Project

By: Tomas Ronolski - AllPennyStocks.com News

Wednesday, December 7, 2016

The silver mining sector started the year with a bang as prices showed improvement during the first half of the year. However, enthusiasm wore down during the second half of the year, with the constant decline in international prices of the metal. However, there are several stocks in the sector which have provided solid returns this year and have robust prospects ahead, regardless of Silver’s spot price. Santacruz Silver Mining Ltd. (TSX-Venture:SCZ) is one such company, It’s stock has jumped over 250% this year so far. Santacruz Silver Mining continues to execute on its corporate plan as the company announced that it has inked a new agreement with Hermosillo Group, a private Mexican company for the sale of the San Felipe project based out of Sonora, Mexico. The company will be divesting 100% of its interest in the project. Santacruz Silver Mining entered into the contract through its wholly owned subsidiary Impulsora Minera Santacruz, S.A. de C.V.


The financial terms of the agreement provide for the payment of $15 million plus value added tax of $2.4 million to the seller. The consideration of the transaction is payable in cash in three tranches. Both the parties to the agreement expect the transaction to be closed by December 19, 2016.

Santacruz Silver Mining plans to use the proceeds for paying Minera Hochschild Mexico, S.A. de C.V., which is the underlying property vendor. It will also issue 13,415,000 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.

The first tranche of $3 million needs to be paid on or before December 9.2016 while $12 million is required to be paid on or before December 19, 2016. The final tranche of $2.4 million is payable on or before February 15, 2017.

The company is likely to benefit from the transaction as the concerned property was deemed to be non-core to the business. Santacruz Silver Mining recently established a new operating base in Zacatecas, Mexico. Arturo Prestamo, President and CEO of the company stated that the company is now in a position to de-lever its balance sheet, in order to achieve better financial standing.

Santacruz Silver Mining also offers good prospects in the future as it plans to boost its work related to the Veta Grande Project. The said project is located in one of the best recognized silver districts in Mexico. The company CEO also added, “The Company's focus in 2017 will be to further optimize the operations at our two producing mines with the goal of increasing production levels and reducing costs."

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