JOHANNESBURG (miningweekly.com) – TSX-V-listed Santacruz Silver Mining has signed a letter of intent (LoI) to sell its interest in the Gavilanes project in Durango, Mexico to an arm's-length third-party gold and silver producer for $3.5-million, plus value-added tax.
Gavilanes is located in the central part of the Sierra Madre Occidental and includes ten mining concessions, covering a total area of 8 832 ha.
"Continuing with our plan to focus on our producing assets within the company, management has made the decision to divest the Gavilanes project," stated Santacruz CEO Arturo Préstamo.
He explained that the company was transitioning into a multi-mine Mexican silver producer, which is expected to generate solid cash flow as Santacruz grows. “The monetisation of Gavilanes would allow us to further improve our operations on the company's two producing assets, and, once completed, will serve to fulfill the remaining obligations under the JMET LLC facility, thereby unencumbering the company's assets."
The LoI is non-binding and the transaction is subject to, among other things, the parties entering into a definitive agreement which will contain customary terms and conditions for a transaction of this nature. The transaction is expected to close on or before August 15.