Silver Standard ups stake in Manantial Espejo

Vancouver — Silver Standard Resources (SSO-V) has acquired Barrick Gold‘s (ABX-T) 20% interest in the Manantial Espejo silver-gold project in southern Argentina.

The junior issued 400,000 shares to Barrick, which agreed to defer a royalty payment of US$5 per oz. gold and US$0.06 per oz. silver until the beginning of commercial production. The royalty was originally due on completion of a final feasibility study. The major will also retain a 3% royalty on certain claims where gold and silver resources are discovered, in addition to those identified at the time of production.

Meanwhile, Silver Standard expects to close a deal that will allow Black Hawk Mining (BHK-T) to acquire half of its 20% direct interest in the Manantial Espejo project, plus $125,000 in cash, in return for a 40% direct interest in the Sulphurets-Bruceside gold silver project in British Columbia. In addition, Silver Standard will pay Black Hawk a net smelter return royalty of 1.2% on any production that exceeds current silver and gold resources already outlined.

When all is said and done, Silver Standard will hold a 10% interest in Manantial Espejo and can earn up to a 40% working interest in the project through payments totalling US$1.53 million (now paid) and work commitments totalling US$4.5 million through 2001, extendable to 2002 under certain circumstances. Black Hawk holds a 90% interest in the project.

To date, US$17 million has been spent on Manantial Espejo. Measured and indicated resources from the deposit total 4.4 million tonnes grading 263.8 grams silver and 4.51 grams gold per tonne. The inferred resource stands at 1.6 million tonnes grading 258.2 grams silver and 3.65 grams gold per tonne. Measured and indicated resources represent 73% of the total resource.