Southern Silver Exploration Corp. (TSX.V: SSV) reported that the Company has executed an agreement with Electrum Global Holdings L. P. to purchase Electrum’s 60% indirect working interest in the Cerro Las Minitas Project in Durango, Mexico for payment of US$15 million, payable in cash and Southern Silver common shares. The purchase of such working interest will increase the Company’s working interest in the Project from 40% to 100%.
Benefits to Southern Silver Shareholders
Timeline of Payment to Electrum under the Agreement
* The Company has the option to pay all cash in lieu of shares. Any shares issued will be subject to applicable Canadian and US resale restrictions.
To secure payments under the Agreement, the Company has agreed to pledge to Electrum the shares representing Electrum’s 60% indirect working interest in the CLM Project.
Because of Electrum’s current shareholdings in the Company, the purchase of Electrum’s 60% indirect working interest in the CLM Project is a related party transaction under Multilateral Instrument 61-101. The Agreement is subject to regulatory approval and other closing conditions, including shareholder approval.
The Company, in seeking both TSX Venture Exchange and shareholder approvals, will convene an extraordinary shareholders meeting to be held in conjunction with an Annual General Meeting on or about September 4, 2020.
Through the transaction, Southern Silver will acquire an additional 49.9 million ounces silver and 1.35 billion pounds of combined lead and zinc to its account based on the current National Instrument 43-101 Mineral Resources estimate of the CLM Project. Additionally, Southern Silver will become more attractive on a corporate level with the Company’s market profile being enhanced by having ownership of one of the larger and highest grade, undeveloped silver projects in the world.
Lawrence Page, Q.C., Southern Silver’s Chairman and Director, stated: “Upon completion of the transaction the benefits to Southern Silvers shareholders and investors will be significant. Sole ownership of the Project inclusive of the significant resources developed to date allows us great latitude in developing the Project for substantial resource growth. The transaction will also provide a 150% increase in attributable resources which will be highly accretive to Southern Silver shareholders.”
Electrum Global Holdings L.P. has exercised 9.0 million share purchase warrants at C$0.15 for gross proceeds to the Company of C$1,350,000. The Company utilized such funds in the payment of a deposit on execution of the Agreement, which deposit will be credited to the US$2 million payment in shares on closing of the Agreement.
Cerro Las Minitas Project
The Cerro Las Minitas project is an advanced exploration stage polymetallic Ag-Pb-Zn-Cu Skarn/CRD project located in southern Durango, Mexico.
The Cerro Las Minitas project as of May 9th, 2019 contains a Mineral Resource Estimate, at a 175g/t AgEq cutoff, of(1)
A total of 133 drill holes for 59,000 metres have now been completed on the CLM Project with exploration expenditures of approximately US$18.5 million equating to exploration discovery costs of approximately C$0.07 per AgEq ounce to the end of 2019.
Southern Silver has identified a further 10,000 metres in exploration drilling for 2020, targeting specific stepouts from strongly silver-enriched mineral intercepts in the Las Victorias, South Skarn and the Mina La Bocona targets. The targeting is designed to increase the current mineral resource estimate by approximately 30%. The CLM Project remains one of the larger undeveloped silver-lead-zinc projects in the world. It is fully permitted to continue exploration on the property, with a strong potential resource growth profile.
About Southern Silver Exploration Corp.
Southern Silver Exploration Corp. is an exploration and development company with a focus on the discovery of world-class mineral deposits. Our specific emphasis is the Cerro Las Minitas silver-lead-zinc project located in the heart of Mexico’s Faja de Plata, which hosts multiple world-class mineral deposits such as Penasquito, San Martin, Naica and Pitarrilla. We have assembled a team of highly experienced technical, operational and transactional professionals to support our exploration efforts in developing the Cerro Las Minitas project into a premier, high-grade, silver-lead-zinc mine. The Company engages in the acquisition, exploration and development either directly or through joint-venture relationships in mineral properties in major jurisdictions. Our property portfolio also includes the Oro porphyry copper-gold project located in southern New Mexico, USA.
Robert Macdonald, MSc. P.Geo, is a Qualified Person as defined by National Instrument 43-101 and supervised directly the collection of the data from the CLM Project that is reported in this disclosure and is responsible for the presentation of the technical information in this disclosure.
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