Golden Queen Mining has revealed its plan to exit from the Soledad Mountain Project, a producing gold-silver mine located in California, US.
In this regard, the Canadian gold ore mining company has entered into a non-binding letter of intent (LOI) to sell its stake of 50% in the Soledad Mountain Project to a group of buyers.
The company, in a statement, said: “Under the terms of the LOI, the purchase price will consist of (a) extinguishment of all amounts owing to the Purchaser by the Company (approximately US$26.5 million as of the date hereof); (b) cancellation of all the Purchaser’s ownership interest in the Company (consisting of 177,701,229 shares, 457,500 options and 18,000,000 warrants); and (c) cash consideration of US$4.25 million.”
Golden Queen Mining said that it is free to explore a superior transaction until 1 April 2019.
As per the LOI, if the buyer sells or transfers the acquired stake in the Soledad Mountain Project for more than $55m, then it has to pay Golden Queen Mining an amount equivalent to 20% of the excess proceeds.
The group of buyers includes Thomas Clay and some members of the Clay family and associated entities.
The gold-silver mine is located near the town of Mojave in Kern County. Production from the mine is carried out through conventional open pit mining methods and the cyanide heap leach and Merrill-Crowe processes for the recovery of gold and silver from crushed, agglomerated ore.
The Soledad Mountain Project entered into commercial production in December 2016.
As per a feasibility study held in February 2015, the project has a life-of-mine average annual gold production of 74k oz and silver production of 781k oz during full production years 2-11.
The main ore types mined at the gold-silver deposit are rhyolite porphyry and flow-banded rhyolite, pyroclastics and quartz latite porphyry.
Golden Queen Mining also undertakes mining of small quantities of siliceous vein material (0.1%) at the project.
In September 2014, Golden Queen Mining entered into a joint venture with Gauss under which the latter invested $110m in the Soledad Mountain Project for a 50% stake. Gauss, in turn, is a joint venture between Jeffries Financial Group and Auvergne.