SilverCrest Mines Inc. Revises Letter of Intent
with Sandstorm Resources Ltd. for Development Financing of the Santa Elena
Project, Mexico
TSX-V: SVL
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For Immediate Release
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VANCOUVER, B.C. April 16, 2009 -
SilverCrest Mines Inc. (the "Company") is pleased to announce
that it has entered into an amended and restated letter of intent with
Sandstorm Resources Ltd. (Sandstorm). The terms of the original letter of
intent enabled Sandstorm to acquire 20% of the future life of mine gold
production from SilverCrest's Santa Elena project (the "Santa Elena
Project") located in Mexico by providing US$12 million in development
financing ("up-front payment") plus ongoing payments and at
SilverCrest's option, debt financing of up to $US6 million.
The amended and restated letter of intent now includes the issuance
to SilverCrest of 3,500,000 common shares of Sandstorm as part of the
upfront consideration. Sandstorm is no longer obligated to provide a
senior secured convertible US$6.0 million loan to SilverCrest. However,
Sandstorm, on a best efforts basis, will assist SilverCrest in securing
debt on its project on comparable terms. The letter of intent still
provides for the acquisition by Sandstorm of 20% of the life of mine gold
production from SilverCrest's Santa Elena Project for an upfront payment of
US$12 million in cash plus ongoing per ounce payments equal to the lesser
of (a) US$350 (which approximates SilverCrest's cash cost of production)
and is subject to an increase equal to 1% per annum commencing on the third
anniversary of the date that the Santa Elena Project begins commercial
production and (b) the then prevailing market price per ounce of gold.
The Company estimates that approximately 50,000 ounces of gold will
be provided to Sandstorm over the life of the current open pit plan or
approximately 6,250 ounces per year. The terms of the letter of intent do
not affect the estimated 4.88 million ounces of silver recoverable over the
life of the initial open pit heap leach operation. The capital to bring the
Santa Elena Project into production is estimated at US$20 million.
Sandstorm has announced that it has filed its final short form
prospectus in all of the provinces in Canada, except the Province of
Quebec, in connection with its previously announced fully marketed public
offering of subscription receipts. A copy of the final short form
prospectus is available on the SEDAR website located at www.sedar.com under
the Corporation's profile. It is anticipated that closing of
Sandstorm's offering will occur on or about April 23, 2009.
The completion of the transactions contemplated remains subject to
the execution of definitive agreements, completion of Sandstorm's equity
offering and receipt of all necessary regulatory and other approvals,
including acceptance by the TSX-V.
Sandstorm 's President and Chief Executive Officer, Nolan Watson and
one of its Directors, David Awram are formerly executive officers of Silver
Wheaton Corp., a mining company listed on both the Toronto and New
York stock exchanges. Through Silver Wheaton, Messrs. Watson
and Awram were involved in the successful execution and financing of
approximately US$1 billion worth of metal streaming transactions over the
past five years.
SilverCrest Mines Inc. is a
"Silver Focused" exploration and development company with a portfolio
of high grade silver and gold deposits and exploration properties located
in Mexico and El Salvador. This property portfolio, which includes reported
indicated and inferred silver resources and substantial exploration
potential, provides an important base from which SilverCrest can develop
its corporate objective of becoming a significant silver asset based
company. The Company's immediate initiative is to acquire and develop
substantial silver resources and ultimately to operate high grade silver mines
throughout North, Central and South America.
This news release contains forward-looking statements, which address
future events and conditions, which are subject to various risks and
uncertainties. The Company's actual results, programs and financial
position could differ materially from those anticipated in such
forward-looking statements as a result of numerous factors, some of which
may be beyond the Company's control. These factors include: the
availability of funds; the timing and content of work programs; results of
exploration activities and development of mineral properties, the
interpretation of drilling results and other geological data, the
uncertainties of resource and reserve estimations, receipt and security of
mineral property titles; project cost overruns or unanticipated costs and
expenses, fluctuations in metal prices; currency fluctuations; and general
market and industry conditions.
Forward-looking statements are based on the
expectations and opinions of the Company's management on the date the
statements are made. The assumptions used in the preparation of such
statements, although considered reasonable at the time of preparation, may
prove to be imprecise and, as such, undue reliance should not be placed on
forward-looking statements.
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