Southern Silver Exploration Corp. (SSVFF)

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Southern Silver acquires the strategic El Sol claim, will end its financial year with C$3.5M in working capital
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April 13, 2020

https://www.caesarsreport.com/blog/southern-silver-acquires-the-strategic-el-sol-claim-will-end-its-financial-year-with-c3-5m-in-working-capital/

Southern Silver Exploration (SSV.V) confirmed it has entered into an agreement with Monarca Minerals to purchase the El Sol claim owned by the latter. The claim is quite small (just 63 hectares) but is strategically located along the northwestern area of Cerro Las Minitas’ Boccona claims and covers the projection of the continuation of a structure in that direction.

Interestingly, it’s Southern Silver who purchased the claim (and not the joint venture company where Southern Silver owns 40% of the Cerro Las Minitas project with private equity group Electrum Global Holdings owning the remaining 60%). SSV will pay US$300,000 in three installments (on the date of the definitive agreement and the subsequent 12 and 18 month anniversary of that agreement) while Monarca Minerals will retain a 2% Net Smelter Royalty of which SSV can repurchase half for US$1M in cash.

Meanwhile, Southern Silver should be happy it raised the cash when a financing window opened last summer. SSV issued 21M shares to raise C$4.2M and as of the end of January, the company still had a working capital position of approximately C$3.7M. Since the end of January, approximately 3.2 million options and warrants have been exercised (on top of the 11.6M options and warrants exercised in the quarter ending in January, adding roughly C$0.25M to the till so we expect Southern Silver to end the current financial year (in April) with a net working capital position of approximately C$3.5M representing C$0.026 per share based on the enlarged share count of 132.4M shares.

Interestingly, the ‘subsequent events’ section of the financial statements also indicate 9.4M warrants and options that were ‘in the money’ with a strike price of C$0.08 expired unexercised. This reduces the warrant overhang (but also means Southern Silver didn’t receive C$750,000 in proceeds from warrant exercises).