Shares of silver mining company
Silver Standard Resources Inc.
) rose 3.3% during the trading session following the news of the
of the completion of sale of its San Agustin project in Durango,
Mexico, to U.S.-based Argonaut Gold Inc. for an aggregate
consideration of roughly $75 million. The company's shares
eventually closed at $6.96, gaining around 3%.
Argonaut is a gold company mainly engaged in exploration, mine
development and production activities.
On Nov 5, 2013, Silver Standard entered into a definitive
agreement with Argonaut to sell its 100% interest in the San
ALEXCO RESOURCE (AXU): Free Stock Analysis
HECLA MINING (HL): Free Stock Analysis Report
PAN AMER SILVER (PAAS): Free Stock Analysis
SILVER STD RES (SSRI): Free Stock Analysis
To read this article on Zacks.com click here.
Under the deal, Silver Standard agreed to divest its
Agustin project for $15 million in cash payable at closing and
$30 million shares of Argonaut (based on the 5-day volume
weighted average sale price for Argonaut shares trading on the
Toronto Stock Exchange prior to signing the definitive agreement)
issued at closing.
Also included in the agreement, another $10 million and $20
million are to be paid in 6 months and 18 months after signing
the agreement, respectively. Silver Standard is also expected to
hold a 2% NSR royalty on sulphide ore produced from San Agustin.
The sale of the San Agustin project has been completed in
accordance with the aforementioned terms and conditions of the
The San Agustin project retains an indicated resource of 1.6
million ounces of gold and 48 million silver ounces within 121
million tons. Additionally, the project holds an inferred
resource of 1.06 million gold ounces and 37 million silver ounces
within 91.2 million tons.
The sale of the San Agustin property in cash and shares is
expected to add value within Silver Standard's portfolio beyond
the mine and development projects. The asset sale will also add
significantly to its cash position, facilitating the funding of
future growth. With this, the company continues to focus on
optimizing its business to deliver long-term, sustainable
Silver Standard, which is among the leading players in the silver
mining industry along with
Pan American Silver Corp.
), currently retains a Zacks Rank #3 (Hold).
Alexco Resource Corp.
), with a Zacks Rank #1 (Strong Buy), is a good investment option
in the silver mining industry.