Allow me to take this opportunity to wish you a very Happy New Year. I hope 2020 brings you good health, much happiness, and plenty of prosperity.
By now you may have seen our first news release of 2020 regarding the sale of the company’s Royalty on the Chipriona project in Sonora, Mexico as at December 31, 2019. The 1% Net Smelter Royalty (NSR) was a legacy, non-core asset that originated from the sale of the project to Agnico Eagle Mines in December 2016. Agnico had an option, not an obligation, to purchase the Royalty for a maximum price of $1.5 million.
The sale of the Royalty at this time was a strategic and prudent decision by your Board, given the company’s current stage of development and absence of a revenue stream aligned with our overall strategy. As Chipriona is still in the exploration and development stage, it was determined the value of an immediate cash injection of $875,000, without any shareholder dilution, was of much greater value to your company than the potentially maximum price Agnico might have been willing to pay at some indeterminate time in the future.
In the near future we plan to launch a new Blog area of our website where we will be writing more about our strategic plans for 2020 where we encourage your questions, comments, & feedback.
Chairman, Sonoro Metals
UPDATE: John was interviewed by Björn Junker on this subject, that interview can be seen here: