VANCOUVER - Pan American Silver Corp. (TSX:PAA) said Tuesday it has sold its Quiruvilca mine in Peru for $2 million to a subsidiary of Southern Peaks Mining, a Cayman Island limited partnership with other mining assets in the South American country.
In addition to purchase price, the buyer has agreed to pay Pan American either a net smelter returns royalty exercisable when the price of silver, zinc and copper hit certain targets, or the price difference between $23 per ounce of silver and the market price on half of Quiruvilca's future silver production.
The payments will be capped at $3 million in any 12-month period until Quiruvilca generates $25 million in earnings before interest, taxes, depreciation or amoritization.
The company said the deal will result in a net gain of about $11.3 million on the sale of the mine's assets and liabilities.
Pan American has seven operating mines in Mexico, Peru, Argentina and Bolivia.