Sandspring Resources (TSX-V:SSP, StockForum) announced today that the company has signed a US$148.5 million precious metals streaming agreement with Silver Wheaton (TSX:SLW, StockForum)for 10% of payable gold production at Sandspring's Toroparu mine in Guyana.
Silver Wheaton will make ongoing payments to Sandspring using the lesser of the market price or US$400 per payable ounce of gold over the life of the Toroparu project.
If certain conditions are met, Sandspring is allowed to initially draw down $13.5 million in cash for final feasibility documentation. The balance of the US$148.5 million is subject to Silver Wheaton electing to proceed with the deal.
If Wheaton decides not to continue with the agreement, Sandspring can either return US$11.5 million or reduce stream percentage from 10% to 0.774%.
In the company press release, Rich Munson, Sandspring CEO, summed up, “This streaming transaction provides a non-dilutive capital commitment of approximately 30% of the $464 million project finance required for the Toroparu Project as determined in Sandspring's Pre-feasibility Study and marks a significant milestone for Sandspring. Furthermore, the addition of Silver Wheaton as a strategic partner brings significant experience and expertise to Sandspring as it continues to develop Toroparu.”
Sandspring stocks rose 21% on the news to $0.23 per share.
Currently there are 132,358,606 outstanding shares with a market cap of $30.44 million.