06:58 AM EST, 03/07/2024 (MT Newswires) -- Dundee Precious Metals Inc. ( DPMLF ) earlier Thursday said it has reached a share purchase agreement with a subsidiary of Sinomine Resource Group Co. Ltd. for the sale of its stake in the Tsumeb smelter in Namibia for US$49 million.

Under the terms of the SPA, Dundee Precious Metals ( DPMLF ) will transfer all assets and liabilities associated with the Tsumeb smelter to Sinomine for consideration of US$49 million in cash through the sale of all issued and outstanding shares indirectly held in Dundee Precious Metals Tsumeb Holding (Pty) Ltd.

Dundee Precious Metals ( DPMLF ) has made limited representations and warranties and provided certain indemnities to Sinomine, subject to a liability cap equal to 50% of the purchase price.

The cash received by Dundee Precious Metals ( DPMLF ) at closing will be less a US$5 million holdback to be held in escrow for a period of six months to secure indemnity obligations under the SPA.

The company is also entitled to be paid all cash collected from IXM SA with respect to a positive balance in metals exposure outstanding at Tsumeb, estimated to be about US$17.2 million.

"We are pleased to announce the sale of the Tsumeb smelter, which is consistent with our strategic objective of focusing on our gold mining assets and simplifying our portfolio going forward," said David Rae, president and CEO of Dundee Precious Metals ( DPMLF ).

The deal is scheduled to close in the third quarter, subject to customary closing conditions, including approval under the Namibia Competition Act and approvals required from Chinese regulatory authorities for overseas investments.

The company plans to use deal proceeds to strengthen its balance sheet and support its core mining business in line with its capital allocation framework.