Montana Goldfields, Inc. and Montana Tunnels Mining, Inc. entered into a definitive asset purchase agreement with Silver Bow Mining Corp. (NYSE American: SBMT) for the sale of the Jefferson County Metallurgical Complex in Montana.
The transaction includes an integrated metallurgical facility situated across approximately 5,000 acres, including separate 15,000-ton-per-day and 1,000-ton-per-day milling and flotation circuits, crushing, storage, tailings and related infrastructure, as well as the historic Montana Tunnels M-Pit. Silver Bow Mining intends to evaluate the complex for the processing of high-grade silver-gold-zinc-lead mineralization from its nearby Rainbow Block Project.
In connection with the transaction, Silver Bow Mining is expected to pay approximately $28.6 million in cash to settle creditor claims and, following receipt of required approvals and final closing, issue 3.5 million contingent value rights. The transaction also provides for a 2% net smelter return royalty and certain net profits interests tied to future production and profitability of specified assets.
The complex is being acquired through a Chapter 11 sale by Montana Tunnels Mining. Completion of the transaction remains subject to approval by the U.S. Bankruptcy Court for the District of Montana, other required approvals and customary closing conditions.
Lucosky Brookman LLP served as transaction counsel to Montana Goldfields, Inc. and Montana Tunnels Mining, Inc. in connection with the transaction.
