TORONTO, May 13, 2021 /CNW/ - Magna Gold Corp. (TSXV: MGR)
(OTCQB: MGLQF) ("Magna" or the "Company") is pleased to announce a
non-brokered private placement of CAD$10,000,000 secured convertible debentures
(the "Debentures") with Delbrook Capital Advisors Inc. ("Delbrook")
on behalf of funds managed by Delbrook. The Debentures mature
in 24 months from issuance and bear interest at a rate of 6.5% per
year. The principal amount of the Debentures is convertible, at the
election of Delbrook, into common shares of the Company at a
conversion price of CAD$1.25 per
common share, representing a 35.5% premium to the 10-day
VWAP. The interest on the Debentures is convertible at the
election of Delbrook into either cash or common shares of the
Company based on the closing price on the day prior to the
applicable interest payment date and will be paid in full,
including in the event of early conversion. The Company will pay
Delbrook a 1.25% arrangement fee on closing of the private
placement. The private placement, which received approval by
Magna's board of directors on May 11,
2021, is subject to the approval of the TSX Venture
Exchange.
Delbrook, which is a founding shareholder of Magna and assisted
in acquiring the Mercedes property in 2018, will become an insider
of the Company upon conversion of the Debentures.
Matthew Zabloski, the Managing
Director of Delbrook commented: "We are excited to continue
supporting Magna as it enters the next phase of its evolution into
a production company with significant exploration potential.
This capital will help Magna accelerate its exploration pipeline
while delivering operationally at the San Francisco Mine. It
is rare to be able to invest in an emerging gold producer with such
an exciting portfolio of assets".
Arturo Bonillas, President and
CEO of Magna stated: "This financing will allow us to categorically
advance on some of the most interesting exploration gold and silver
properties that the Company has acquired in the last year. Now that
the San Francisco Mine is reaching full scale production, we plan
to focus on bringing value to stakeholders by increasing the
Company's geological and mineral resources via intense drilling and
exploration."
After the closing of the private placement, Magna will commence
mobilization and exploration activities across its portfolio.
Exploration activities include:
- Margarita Silver Project – 10,000 metres ("m") of
core drilling for expansion exploration at depth of the Margarita
vein system and infill resource definition along strike. Margarita
is a high-grade silver target located in the State of Chihuahua acquired from Sable
Resources late in 2020 who conducted two successful drill
campaigns. The property hosts five quartz-barite and minor calcite
epithermal veins-breccias of low to intermediate sulphidation
affinity hosted by volcanic rocks of andesitic and rhyolitic
composition. The property lies 15 kilometres ("km") northwest on
strike with Gatos Silver Inc.'s Los Gatos Mine. Magna intends to
carry out a mineral resource and preliminary economic assessment
upon completion of the drill program.
- Mercedes Gold Project – 1,500
m of core drilling and 10,000
m of reverse circulation ("RC") drilling for expansion and
infill on the La Lamosa target to convert and expand the current
inferred geological resource into M+I+I categories. Also
1,500 m of core drilling on the Mina
del Oro target to define an
initial gold and silver resource on that area near la Lamosa Hill.
Additionally, carry out Induced Polarization & Resistivity
lines to test the quartz-tourmaline breccias at depth, including
five targets located in a geological environment of epithermal high
sulphidation copper porphyry targets.
- San Judas Gold Project – 5,000
m of RC drilling and 1,000 m
of core drilling on four different targets within the property.
San Judas is located within the
prolific Mojave – Sonora Megashear and 40 km west of the San
Francisco Mine.
- Veta Tierra Gold Project – 2,000
m of RC drilling to follow up on discovery hole VT14-002
(1.286 g/t Au over 33.85 m including
22.40 m of 3.26 g/t Au) from a drill
program carried out in 2014 drill program. Veta Tierra is located 4 km north of the San
Francisco Mine and the objective of the drill program is to
potentially define a satellite open pit target for heap
leaching.
- La Pima Silver Project – 3,000
m of RC drilling to test down dip extension of the discovery
holes on four different areas and test new gold anomalies north of
the project. The target at La Pima is limestone ridges
approximately 2.5 km long with varying surface thicknesses from 40
to 10 m. The Pima mine, West and
North targets are the focus of drilling to test the continuity of
this mineralization at depth. In the Pima mine target, the
mineralized limestones have a thickness of 40 to 60 m wide and a known depth of 70 m and a length of at least 150 m near the main intersection of the northwest
and northeast structures, leaving the exploration potential open at
depth and laterally.
- Los Muertos – Carry out extensive field work to further
define drill targets. The property is in the La Colorada District in Sonora, Mexico, defined by hundreds of low
sulphidation epithermal-vein type historic silver-gold deposits and
showings which remain largely unexplored. Vein clusters at Los
Muertos share a common orientation with the four main zones at
Argonaut's La Colorada mine. Los
Muertos project's immediate area is characterized by extreme
silicification, hematization and argillic alteration, suggesting
the potential for both extensive silver-gold veins systems, and
coincident, pervasive disseminated mineralization in the host
sedimentary and volcanic rocks.
About Magna Gold Corp
Magna is a Mexico focused gold/silver production company
focused on acquiring, exploring, developing and operating quality
precious metals properties in Mexico. It is committed to advancing its 100%
owned highly prospective mineral properties located in Sonora and in Chihuahua. The primary strength
of the Company is the team of highly experienced mining
professionals with a proven track record of developing properties
in Mexico from discovery to
production. Magna employs community members and services in its
operations.
ON BEHALF OF THE BOARD OF DIRECTORS
Arturo Bonillas
President and CEO
THIS PRESS RELEASE DOES NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES IN ANY JURISDICTION,
NOR SHALL THERE BE ANY OFFER, SALE, OR SOLICITATION OF SECURITIES
IN ANY STATE IN THE UNITED STATES
IN WHICH SUCH OFFER, SALE, OR SOLICITATION WOULD BE UNLAWFUL.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this release.
Qualified Person
James
Baughman (P. Geo.), Consulting Geologist and a Qualified
Person as defined by NI 43-101, has approved the scientific and
technical information in this news release.
Cautionary Statements
This News Release includes certain "forward-looking
statements" which are not comprised of historical facts.
Forward-looking statements include estimates and statements that
describe the Company's future plans, objectives or goals, including
words to the effect that the Company or management expects a stated
condition or result to occur. Forward-looking statements may be
identified by such terms as "believes", "anticipates", "expects",
"estimates", "may", "could", "would", "will", or "plan". Since
forward-looking statements are based on assumptions and address
future events and conditions, by their very nature they involve
inherent risks and uncertainties. Although these statements are
based on information currently available to the Company, the
Company provides no assurance that actual results will meet
management's expectations. Risks, uncertainties and other factors
involved with forward-looking information could cause actual
events, results, performance, prospects and opportunities to differ
materially from those expressed or implied by such forward-looking
information. Forward-looking information in this news release
includes, but is not limited to, the Company's objectives, goals or
future plans, statements, exploration results, potential
mineralization, exploration and mine development plans, production
(including the timing of the commencement of commercial
production), processing and mining expectations, cash flow
generation and balance sheet projections. Factors that could cause
actual results to differ materially from such forward-looking
information include, but are not limited to failure to identify
mineral resources, failure to convert estimated mineral resources
to reserves, the inability to complete a feasibility study which
recommends a production decision, the preliminary nature of
metallurgical test results, delays in obtaining or failures to
obtain required governmental, environmental or other project
approvals, political risks, uncertainties relating to the
availability and costs of financing needed in the future, changes
in equity markets, inflation, changes in exchange rates,
fluctuations in commodity prices, delays in the development of
projects, capital, operating and reclamation costs varying
significantly from estimates and the other risks involved in the
mineral exploration and development industry, risks
related to the effects of COVID-19 on the Company; and those
risks set out in the Company's public documents filed on SEDAR.
Although the Company believes that the assumptions
and factors used in preparing the forward-looking
information in this news release are reasonable, undue reliance
should not be placed on such information, which only applies as of
the date of this news release, and no assurance can be given that
such events will occur in the disclosed time frames or at all. The
Company disclaims any intention or obligation to update or revise
any forward-looking information, whether as a result of new
information, future events or otherwise, other than as required by
law.
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SOURCE Magna Gold Corp.