Mandalay Resources to sell non-core Challacollo silver-gold project

Mandalay Resources Corp (TSE:MND) is set to sell its non-core Challacollo silver-gold project in Chile, which will boost the metals miner’s two producing assets.

It has struck a non-binding letter of intent (LOI) with Aftermath Silver over the acquisition of Minera Mandalay Challacollo Limitada (MMC), which owns the Chile asset.

The total consideration is for C$11.625mln.

“We are pleased to announce the proposed sale of the Challacollo project to Aftermath Silver,” said Dominic Duffy, president and chief executive at  Mandalay.

“One of Mandalay’s key strategic objectives for 2018 was to maximize the value of our portfolio through the sale of non-core assets.

“The proposed sale of Challacollo will allow us to realize substantial value for the asset, while continuing our focus on streamlining operations at our two producing assets, strengthening our balance sheet, and positioning Mandalay for future growth.”

The miner has producing assets in Australia (Costerfield) and Sweden (Bjorkdal).

Duffy added: “We are pleased to be working with the Aftermath team, who have the significant industry experience and complementary skill sets that we believe are necessary to create additional value for developing a project such as Challacollo.”

Under the terms of the proposed deal, Mandalay would receive  C$1mln in cash, payable on closing, and C$1.25mln in cash payable not later than the 18 month anniversary before a further C$1.5mln.

A payment is also to be paid not later than November 30 next year of C$7.875mln in cash, or shares, or a combination of both.

Aftermath, said Mandalay, is led by highly experienced industry executives including Michael Williams (president and chief executive officer of Vendetta Mining Corp) and Sean Hurd (mining financier and executive).

Also Peter Voulgaris (a geologist and engineer with over 20 years of experience, including some of Australia’s largest gold mines and at Ivanhoe Mine’s Oyu Tologi project), and David Terry (a geologist, advanced project specialist and independent director of Golden Arrow Resources).

Story by ProactiveInvestors