Santacruz Silver Mining Ltd (TSX-V:SCZ, OTC:SZSMF) has announced the signing of definitive agreements to amend the terms related to the earlier sale of Glencore PLC (LSE:GLEN)'s Bolivian mining assets to Santacruz.
The agreements, effective from October 3, 2024, include an omnibus agreement and an amended security agreement, following negotiations with Glencore.
Santacruz Silver CEO Arturo Prestamo highlighted the significance of this agreement, stating it provides enhanced financial flexibility for Santacruz.
“The revised payment structure allows us to better manage our cash flow while maintaining the ability to accelerate payments if it becomes beneficial to do so,” Prestamo said.
“We are also pleased to maintain our strong partnership with Glencore, whose collaboration has been invaluable in reaching these mutually beneficial terms. We look forward to continuing this productive relationship as we execute on our vision for the future.”
Under the new agreements, Santacruz will pay Glencore up to $80 million in cash, structured as eight annual installments of $10 million, commencing on or before November 1, 2025.
An Acceleration Option allows Santacruz to pay off the remaining balance early, with a prepayment amount of $40 million if executed before the first installment due date.
Additionally, Santacruz will issue a contingent value right (CVR) that provides Glencore with a monthly payment of $1,333,333.33, subject to a total cap of $77.7 million, contingent on the average LME spot price of zinc meeting certain thresholds. If the price exceeds specified amounts, additional payments will also be made.
The agreements will secure Santacruz’s payment obligations against its Bolivian mining assets and are pending final acceptance by the TSX Venture Exchange.
Santacruz Silver Mining is focused on the operation, acquisition, exploration, and development of mineral properties across Latin America, with notable operations in Bolivia and Mexico.