DENVER, COLORADO--(Marketwired - Dec. 23, 2013) - Sandspring Resources Ltd. ("Sandspring" or the "Company") (TSX VENTURE:SSP) is pleased to announce that it has received the initial draw down of US$13.5 Million (the "Initial Draw Down") from Silver Wheaton (Caymans) Ltd., a wholly owned subsidiary of Silver Wheaton Corp. pursuant to the terms of the precious metals purchase agreement that was announced in November. Under the agreement, Silver Wheaton agrees to pay Sandspring total cash consideration of US$148.5 million plus an ongoing production payment of the lesser of US$400 (subject to a 1% annual inflation adjustment starting in the fourth year after the completion test is satisfied) and the prevailing market price for 10% of the life of mine payable gold production from the Company's Toroparu Project in Guyana S.A. The Initial Drawdown was payable upon meeting certain conditions which have now been satisfied. The proceeds from the Initial Drawdown will be used primarily for advancement of the final feasibility documentation for the Toroparu Project.
The balance of the US$148.5 million is subject to Silver Wheaton's election to proceed and is payable in installments during construction of the Toroparu Project once all necessary mining licenses have been obtained and conditions pertaining to final feasibility, the availability of project capital finance, the granting of security to Silver Wheaton and other customary conditions are satisfied. If following receipt of feasibility documentation, or after December 31, 2015 if feasibility documentation has not been delivered, Silver Wheaton elects not to proceed, Sandspring may elect to either return US$11.5 million to Silver Wheaton and terminate the agreement or to reduce the stream percentage from 10% to 0.774%.
Sandspring's financial advisor in the precious metals purchase agreement was Cutfield Freeman & Co and Davies Ward Phillips & Vineberg LLP was Sandspring's legal advisor.
Sandspring Resources Ltd. is a Canadian junior mining company currently moving toward a definitive feasibility study for the multi-million ounce Toroparu Project in the Republic of Guyana. Visit Sandspring's website at www.sandspringresources.com.
Additional information on Sandspring can be viewed on SEDAR under the Company's profile at www.sedar.com or on Sandspring's website at www.sandspringresources.com.
This press release includes certain forward-looking statements concerning future performance and operations of the Company, including the successful completion of the Company's final feasibility study, as well as management's objectives, strategies, beliefs and intentions. Forward-looking statements are frequently identified by such words as "may", "will", "plan", "expect", "anticipate", "estimate", "intend" and similar words referring to future events and results. Forward-looking statements are based on the current opinions and expectations of management at the time such statements are made. All forward-looking statements and information is inherently uncertain and may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements or information.
Forward-looking statements are subject to a variety of assumptions, risks and uncertainties, including risks associated with the ability of the Company to satisfy the conditions precedent to payment of the advance under the precious metals purchase agreement, the speculative nature of mineral exploration and development, fluctuating commodity prices, changes in project parameters as plans continue to be refined, uncertainties of project cost overruns or unanticipated costs and expenses, uncertainties inherent in conducting operations in a foreign country, uncertainties related to the availability and costs of financing needed in the future, uncertainties related to the ability to enter into the contracts necessary to develop the mining project on reasonable terms, the risk that the conclusion of pre-production studies may not be accurate, the risk that the Company may be unable to successfully advance the Toroparu Project to feasibility, risks that the Company may not obtain positive results from ongoing evaluation and testing of multiple gold targets located elsewhere in the Company's landholdings, operating or technical difficulties in connection with mining or development activities, labour disputes, and contests over title to properties, particularly title to undeveloped properties, among other risks as described in our public filings available at www.sedar.com. Actual events or results may differ materially from those projected in the forward-looking statements and we caution against placing undue reliance thereon. Sandspring Resources Ltd. has an ongoing obligation to disclose material information, as it becomes available.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.