Pretivm is an intermediate gold producer with the high-grade gold underground Brucejack Mine
Pretivm Closes Sale of Snowfield Property to Seabridge. (Credit: Tumisu from Pixabay.)
Pretium Resources Inc. (TSX/NYSE: PVG) (“Pretivm” or the “Company”) announces that it, along with its wholly-owned subsidiary, Pretium Exploration Inc., has closed the previously announced sale (the “Transaction”) of the Snowfield property (“Snowfield”) to KSM Mining ULC (“KSM Mining”), a wholly-owned subsidiary of Seabridge Gold Inc. (“Seabridge”).
Under the terms of the Agreement, Pretivm has received US$100 million in cash, and will receive further consideration comprised of the following:
A 1.5% net smelter royalty in respect to all production from Snowfield (the “NSR Royalty”).
A US$20 million contingent cash payment (the “Deferred Payment”) payable within six months of the earlier of KSM Mining (or a parent company) completing a bankable feasibility study which includes production of reserves from Snowfield or the commencement of commercial production from Snowfield or any part of Snowfield. US$15 million of the Deferred Payment represents an advance NSR Royalty payment and shall offset amounts payable under the NSR Royalty.
“The divestment surfaces immediate value for a non-core asset and accelerates our plans to deleverage our balance sheet,” said Jacques Perron, President and Chief Executive Officer of Pretivm. “Combining Snowfield with Seabridge’s other assets creates synergies of scale that improves the likelihood it will reach production and the royalty ensures our participation in that long-term success.”
The cash proceeds of the Transaction will be applied to the revolving portion of Pretivm’s credit facility, which as of September 30, 2020 had an outstanding principal balance of US$198.0 million.
The transaction will result in a non-cash impairment loss to be recorded in the fourth quarter of 2020. Complete financial results, including the non-cash impairment loss will be disclosed in the Company’s fourth quarter 2020 operational and financial results. As of September 30, 2020, the book value of Snowfield was US$232.1 million.
Source: Company Press Release