TORONTO (miningweekly.com) - Silver Standard Resources (SSRI) announced last week it will sell its Snowfield and Brucejack projects in British Columbia to a company led by former CEO Robert Quartermain for C$450-million, in a deal that gets the thumbs up from Dahlman Rose analyst Adam Graf.

"We think this is a great move for SSRI as it will get them both cash proceeds, and a market valuation for the Snowfields and Brucejack assets," Graf wrote in a note.

"Further, we believe that SSRI currently receives little to no value for these assets in the market," he added.

Graf commented that Quartermain was an "excellent choice" to oversee the assets, because he is familiar with them, has a proven track record and is well regarded in the market. Quartermain resigned as CEO of Silver Standard in January.

The sale could also prove to be good news for another precious-metals company, Seabridge Gold, as it provides a good market comparable with Seabridge's KSM project, he noted.

"We see this as a positive for both Silver Standard and Seabridge," Graf wrote.

Silver Standard announced on Friday it will sell the Snowfield and Brucejack projects to Quartermain's Pretium Resources, in exchange for at least C$215-million in cash, and the balance of the C$450-million in Pretium shares.

Pretium is planning an initial public offering (IPO), and the shares paid to Silver Standard will be valued at the offering price.

Pretium plans to close the IPO and the Silver Standard transaction in December, the company said separately.

The cash-shares ratio will be determined by how much Pretium raises in its IPO, and Silver Standard said it expects to hold less than 50% of the company after the deal closes.

Silver Standard will appoint two of Pretium's five directors.

In September, Silver Standard announced the results of a study on developing the Snowfield and Brucejack deposits as a single project.

The Snowfield/Brucejack project would be operated as an openpit mine, with an estimated 27-year mine life, and would require capital expenditure, including contingencies, of around $3,5-billion, the company said at the time.

The operation would produce about 960 000 oz/y of gold in the first eight years, and 700 000 oz/y over the life-of-mine, plus about four-million ounces of silver, 44-million pounds of copper, three-million pounds of molybdenum and 9 000 kg of rhenium.

Silver Standard achieved commercial production in December 2009 at its Pirquitas mine, in Argentina.

The company announced in February this year it would sell its Silvertip project in BC, as part of an ongoing rationalisation of noncore assets in its portfolio.

Shares in Vancouver-based Silver Standard slid 0,93% on Monday, to C$24,57 apiece by 16:00 in Toronto.

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