Aftermath Silver Ltd (CVE:AAG) (OTCQB:AAGFF) revealed that it had now inked a definitive acquisition agreement with SSR Mining Inc over the previously announced US$13 million deal to buy the Berenguela silver-copper project in Puno, Peru.
"I'd like to thank everyone at SSR Mining and the Aftermath Silver team here, and in Peru, for all of their hard work in drafting this agreement," said Ralph Rushton, president of Aftermath in a statement.
READ: Aftermath Silver unveils new Cachinal project resource estimate showing 16.32 million indicated ounces of silver
"The time frame from the initial approach to SSRM to execution of this agreement has been very short, and is a credit to the professionalism of everyone involved. We're looking forward to getting down to work at Berenguela as soon as COVID-19 safety protocols permit."
Final closing is still subject to SSR Mining having reacquired a 100% direct and indirect interest in SOMINBESA, the owner of the asset, from previous operator Valor Resources Ltd (ASX:VAL) (FRA:LFY) and the final approval of the TSX Venture Exchange and certain other customary conditions.
Berenguela boasts easy access and is a silver–copper epithermal polymetallic carbonate-replacement deposit with a total land package of 6,594 hectares.
According to a historic 2018 JORC resource, it contains 98 million ounces of measured and indicated silver. It also hosts 624 million pounds of copper in the measured and indicated category.
The transaction consists of various staged cash payments and C$3 million of Aftermath shares. Aftermath has already paid US$1 million as a deposit and will pay a further US$1 million cash on the initial closing date.
It must complete a preliminary feasibility study (PFS) and file a 43-101 technical report summarizing the PFS within 48 months of the initial closing date.
There is also a sliding-scale net smelter royalty (NSR) on all mineral production from the Berenguela project for the life of mine starting at the declaration of commercial production. This is based on:
- 1% NSR on all production when the silver market price is up to and including US$25 per ounce
- 1.25% NSR on all production when the silver market price is over US$25 per ounce and when the copper market price is above US$2 per pound.
Aftermath Silver currently owns 80% of the Cachinal silver-gold project in Chile, with an option to acquire the remaining 20% from SSR Mining. In addition, the exploration company has an option to acquire a 100% interest in the Challacollo silver-gold project near Iquique, also in Chile.
Contact the author at giles@proactiveinvestors.com