Silver Standard Resources Inc. (NASDAQ:SSRI)(TSX:SSO) today announced that it has entered into an agreement to sell its Snowfield and Brucejack Projects in northern British Columbia to Pretium Resources Inc., a company formed to acquire and explore precious metals projects, led by Robert A. Quartermain.
Under the terms of the Sale Agreement, Silver Standard will receive total consideration of $450 million, consisting of a minimum of $215 million in cash and the balance in common shares of Pretium valued at the offering price of such shares under an initial public offering being undertaken by Pretium (the "IPO"). The amount of the purchase price payable in cash will increase by the amount of the proceeds realized by Pretium under the IPO in excess of $265 million. On completion of the transaction, Silver Standard's ownership interest in Pretium is expected to be less than 50%.
"The sale of Snowfield and Brucejack is the culmination of an extensive review of strategic alternatives focused on developing projects that are core to capability and strategy whilst monetizing project options that are best developed by others," said John Smith, Silver Standard's Chief Executive Officer. "Bob Quartermain has a proven track record in capturing value from exploration and we look forward to Snowfield and Brucejack being given the absolute focus by Pretium to build value from continued exploration and project definition."
As contemplated by the Sale Agreement, Silver Standard will appoint two nominees to the five-member board of directors of Pretium at closing. The Company will also have the right to purchase or sell securities under subsequent equity offerings, as long as it holds at least 10% of the outstanding equity securities of Pretium.
The transaction has been approved by Silver Standard's board of directors and is subject to a number of conditions, including the raising by Pretium of a minimum of $265 million in proceeds under the IPO. The closing of the transaction is expected to occur before the end of the year. In this news release, all references to $ refer to Canadian dollars.
Source: Silver Standard Resources Inc.