Denver-based Apex Silver Mines (AMEX: SIL) reported it has signed a non-binding letter of intent to sell its 65% stake in the San Cristóbal mine in Bolivia to its JV partner Sumitomo for US$22.5mn cash.
Sumitomo, which owns 35% of Minera San Cristóbal (MSC) - the Bolivian subsidiary that controls the mine - has lent MSC US$82mn, which is still outstanding, Apex said in a statement.
If the debt were fully convertible into stock it would provide Sumitomo with a total aggregate interest in San Cristóbal of 53.6%. Sumitomo has the right to convert the outstanding debt into equity in MSC, according to the statement.
In light of that, Apex and Sumitomo have worked out the deal whereby Apex would receive US$22.5mn in cash for the transaction.
San Cristóbal produced roughly 75,000t of silver-lead-zinc concentrates in the first quarter of this year after starting production in 3Q07. Apex previously said the mine is expected to produce 16Moz silver, 235,000t zinc and 80,000t lead in 2008.
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