Mandalay Resources Corp (TSE:MND), the metals miner, says it can now devote operational attention to its Björkdal and Costerfield mines as it struck a definitive agreement with Aftermath Silver Ltd (CVE:AAG) for the sale of its Challacollo silver-gold project in Chile.
Aftermath will acquire 100% of Minera Mandalay Challacollo Limitada (MMC) for a total of up to C$10 million, comprising of C$7 million in non-contingent consideration.
There is also a 3% net smelter returns royalty on production for Mandalay at the Challacollo project, capped at C$3 million.
READ: Mandalay Resources strikes binding option deal with Equus Mining over Cerro Bayo
"We are pleased to see the Aftermath transaction executed and the restart of an exploration campaign on the concession," said Dominic Duffy, the president and CEO at Mandalay.
"This transaction continues Mandalay’s objective of creating value from its non-operating assets, with the previously announced transactions at Cerro Bayo and the sale of non-core concessions at Challacollo to a third party, also completed in the last quarter. Mandalay is now well positioned to focus on improving operations at Björkdal and Costerfield with these projects in Chile resolved."
The non-contingent consideration consists of: C$1 million in cash payable on or before November 19 this year; C$1 million in cash on or before December 20 next year and a final payment of C$5 million payable on or before April 21, 2021.
The final payment can be paid in cash or common shares of Aftermath. Aftermath will also assume Mandalay’s existing contingent payment and royalty obligations to SSR Mining with respect to the project.
Contact the author at giles@proactiveinvestors.com
