Vancouver, British Columbia--(Newsfile Corp. - February 18, 2016) - Kootenay Silver (TSXV: KTN) announced an option with Pan American Silver (TSX: PAA) (NASDAQ: PAAS) on Kootenay's Promontorio Mineral Belt silver properties in Mexico. Pan American, through its Mexican subsidiary, can earn a 75% interest in both the Promontorio and La Negra deposits.
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James McDonald, President and CEO of Kootenay stated: "We are very excited to join forces to aggressively develop our Promontorio Mineral Belt assets with Pan American, one of the world's esteemed mining companies and operators of seven silver mines in Mexico, Argentina, Peru and Bolivia. Bringing approximately US$16 million in cash payments and exploration investments and a carried interest to commercial production, along with a CDN$2 million direct investment in Kootenay, the PAS Transactions underscore Pan American's confidence in the potential viability of La Negra and the Promontorio Mineral Belt."
Michael Steinmann, President and CEO of Pan American stated: "Kootenay has done an excellent job exploring their large land package in the Promontorio Mineral belt, located just 190 km NW of our Alamo Dorado mine. Kootenay has already defined mineral resources at Promontorio and both deposits retain excellent exploration potential. This is an ideal entry point for Pan American into a highly prospective mineral belt located in a preferred jurisdiction, which will allow us to add value by utilizing our proven expertise in exploration and project development."
As the transactions are arm's length, they can proceed with shareholder approval. Upon exercise of the Option, the parties will enter into a joint venture pursuant to which Kootenay will retain a 25% carried interest to production.
This follows Kootenay's recent business combination with Northair Silver, which created a leading Mexican consolidator.
The new $2 million equity investment by Pan American for approximately 9.1 million shares at $0.22 together with the US$8 million in cash payments, adds to Kootenay's financial strength and gives the company more flexibility to focus on the advancement of the La Cigarra silver asset that Northair brought to the table.
For more information about Kootenay Silver, please visit their website www.kootenaysilver.com, contact James McDonald at 403-238-6986 or email investor@kootenaysilver.com.
For more information about Pan American Silver, please visit their website www.panamericansilver.com, contact Kettina Cordero, Manager of Investor Relations at 604-806-3172 or email info@panamericansilver.com.
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