Aftermath Silver Ltd (CVE:AAG) (OTCQB:AAGFF) revealed on Monday that it has inked a binding letter of intent with SSR Mining Inc to buy the Berenguela silver-copper project in Puno, Peru by acquiring all SSR Mining’s shares in the Peruvian holding company Sociedad Minera Berenguela SA for nearly US$13 million in staged cash payments, an investment in Aftermath shares and net smelter return royalties.
The Canadian junior explorer focused on silver said the Berenguela silver–copper project is an epithermal polymetallic carbonate-replacement deposit with a total tenement package of 6,594 hectares.
Aftermath Silver said the project was easy to access, located 50 kilometers from Juliaca and 204 kilometers from Arequipa, which have daily flights to Peru’s capital Lima. It’s also six kilometers from the town of Santa Lucia, which has railway access to the port of Matarani.
According to a historic 2018 JORC mineral survey, it contains 98 million ounces of measured and indicated silver, plus 28 million ounces of silver in the inferred category. It also boasts 624 million pounds of copper measured and indicated, and an additional 147 million pounds inferred.
A historic 2018 scoping study estimated the open pit mine with a life of 12 years at 2 million tonnes per year.
Aftermath said the two companies have agreed to a total consideration of US$13 million made in staged cash payments up to 72 months following the closing date, as well as C$3 million worth of Aftermath Silver shares and a sliding scale net smelter returns royalty (NSR).
The deal includes a sliding scale net smelter returns royalty on all mineral production from the Berenguela project for the life of the mine starting at the declaration of commercial production, based on a 1% NSR, on all mineral production when the silver market price is up to and including US$25/ounce, and 1.25% NSR on all mineral production when the silver market price is over US$25/ounce and when the copper market price is above $2/lb.
In a statement, Aftermath Silver CEO Ralph Rushton said the Berenguela acquisition "perfectly matches our corporate strategy of acquiring de-risked assets with immediate value creation for our shareholders.”
He added: “When the Berenguela acquisition is complete, Aftermath Silver will have assembled one of the largest portfolios of silver development assets. Combined with the organic growth we hope to achieve at Challacollo, we believe it positions Aftermath as one of the preeminent silver development companies.”
Aftermath Silver currently owns 80% of the Cachinal silver-gold project, 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, in Chile.
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