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Coeur to sell Bolivian silver mine ahead of closure

Coeur Mining Inc. said Dec. 22 that it agreed to sell a subsidiary that owns and operates the San Bartolomé silver mine and processing facility in Bolivia to privately held Swedish company Argentum Investments AB.

In exchange for selling Empresa Minera Manquiri SA, Coeur will receive a 2% net smelter return royalty on all metals processed at the San Bartolomé plant a year after the deal closes. The company values the NSR at about US$5 million and expects the deal to close in early 2018.

Coeur will also receive all refunds of value added tax prior to the deal closing, with the balance of outstanding VAT as of Nov. 30 totaling US$13.0 million.

The seller will also receive one-year promissory notes worth the same as the subsidiary's cash and equivalents as at deal close, or Jan. 31, 2018, whichever occurs first. As of Nov. 30, these amounted to US$28 million.

"San Bartolomé was an important operation for the company after it was constructed and placed into production in 2008. However, the mine's short remaining life, higher operating costs and future estimated closure-related costs led the company to conclude that a sale to a new owner at this time made strong strategic sense," said Mitchell Krebs, president and CEO of Coeur.