SilverCrest Sells 20% Of Future Production To Sandstorm For $12 Million, Receives Right To Loan

SilverCrest Mines Inc. has forward-sold 20% of the production of its Santa Elena project, not yet a producer, to Sandstorm Resources Ltd. In exchange for US$12 million upfront, SilverCrest is obliged to sell Sandstorm up to that 20% with a price ceiling of $350/oz. After three years of production, the cap increases by 1% per year. The deal is contingent upon an equity financing going through for Sandstorm, on SilverCrest being cleared to bring the mine into production, and on SilverCrest getting sufficent financing to make Santa Elena a producer. In addition, SilverCrest can borrow US$6 million from Sandstorm at a rate of 7%, with a conversion feature. Half of the loan can be converted to SilverCrest shares at 80 cents per share; the rest can be converted into gold at $1000/oz. The news release goes into more detail on the agreement.

This item was disseminated last evening. Prior to it, SilverCrest closed at 51 cents, up 2 cents on the day, and Sandstorm didn't trade: its last close was on Monday, at 50 cents.

SilverCrest's Google Finance web page is here; Sandstorm's is here.

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