Dundee to Sell Stake in Kapan Mine to Polymetal International

Dundee Precious Metals Inc. (TSX:DPM) announced that it’s entered into a definitive agreement under which it will sell its interest in the Armenia-based Kapan mine to Polymetal International plc (LSE:POLY).
As quoted in the press release:

Under the Proposed Transaction, DPM, or a subsidiary thereof, will receive consideration consisting of (i) US$10 million in cash from the buyer (subject to a working capital adjustment following closing), (ii) US$15 million in Polymetal ordinary shares, and (iii) a 2% net smelter royalty on future production from the Kapan property capped at US$25 million. DPM will continue to maintain a presence in Armenia through joint venture arrangements in respect of certain exploration assets in the central part of the country. The number of ordinary shares of Polymetal to be issued in the Proposed Transaction will be determined based on the average market price for such shares on the London Stock Exchange for the five trading days ending two trading days prior to closing of the Proposed Transaction.

Rick Howes, president and CEO of Dundee, commented:

We are pleased to announce the sale of Kapan to Polymetal. The proceeds from the sale will serve to strengthen our balance sheet and reduce future capital requirements, which can be utilized to support the future growth of our business, and allows us to focus on our remaining core assets. We would also like to thank the community of Kapan and our employees for their support since we acquired the asset in 2006 and will do our utmost to ensure a smooth transition to the new owner.

Click here to read the full Dundee Precious Metals Inc. (TSX:DPM) press release.