Summa Silver Corp. (TSXV: SSVR | OTCQB: SSVRF) has announced that it has amended two lease agreements covering key portions of its Mogollon silvery project, near Silver City New Mexico.
The amended leases give the company the right to repurchase half of the existing 4% production royalty held by the underlying owners of the property, with the intention of reducing the royalty burden on future potential revenue generated by the project.
Under the first amended lease agreement, Summa can repurchase up to a 2% royalty for aggregate cash payments of US$1M. Under the second lease agreement, Summa can do the same, but for aggregate cash payments of US$2M.
The leases are for ten years and and are renewable in ten-year terms at the company’s election. The Company must make aggregate cash payments of US$99,067 per year and the payments are indexed to the Production Price Index for Industrial Commodities (PPI) as published by the United States Bureau of Labor Statistics.
The agreements allow the company to choose to pay up to US$27,018 (indexed to PPI) of the annual amount by issuing common shares at the 20-day volume weighted average price of the company’s shares traded on the TSXV. The company has done just this, following the successful amendment of leases, by announcing plans to issue 27,400 common shares at US$1.24 per share.
Galen McNamara, CEO, stated: “These amended lease agreements represent a strong step towards reducing potential production royalty burdens on important portions of the property, including the Consolidated Extension drilling area. The previously existing lease agreements provided the underlying property owners with a 4% production royalty and no company buy-back option. The company now can repurchase 2% of that royalty on equitable terms for all parties. We would like to thank the underlying landowners for their long-term commitment to the area and for working with us so closely to get these agreements done.”
For further information please visit: https://summasilver.com/
