Vancouver's Silver Standard Resources Inc. (TSX:SSO) said Friday morning it is selling two exploratory-stage projects in B.C. for $450 million to a company headed by its former president and CEO Robert Quartermain.
Quartermain stepped down as Silver Standard’s president and CEO last January and formed Pretium Resources Inc., which is acquiring the Snowfield and Brucejack projects in northern B.C.
Quartermain had been head of Silver Standard since 1985.
Snowfield is a gold-copper deposit with molybdenum and rhenium mineralization located 65 kilometres north of Stewart, B.C. Bluejack, which is adjacent to Snowfield, is a gold and silver deposit.
The deal includes between $215 million and $265 million in cash.
The reminder will be in common shares of Pretium, with the balance depending on Pretium’s share value once it undertakes a planned initial public offering.
Silver Standard’s stake in Pretium is expected to be less than 50% after the sale.
John Smith, Silver Standard’s CEO, said, “The sale of Snowfield and Brucejack is the culmination of an extensive review of strategic alternatives focused on developing projects that are core to capability and strategy whilst monetizing project options that are best developed by others.”
He said Quartermain has a proven track record in capturing value from exploration.
Silver Standard will also appoint two nominees to Pretium’s five-member board of directors after the sale’s close.
It will also have the right to buy or sell securities under subsequent equity offerings by Pretium, as long as it holds at least 10% of that company’s outstanding equity securities.
The deal has been approved by Silver Standard’s board of directors and is subject to a number of conditions, including Pretium raising a minimum of $265 million under the IPO.
The transaction is expected to close before the end of the year.
Silver Standard’s share price range during the last week: $24.20 to $23.84; 52-week high: $26.21; 52-week low: $16.21.