TSX.V: SCZ
FSE: 1SZ
VANCOUVER, Aug. 29, 2018 /CNW/ - Santacruz Silver
Mining Ltd. (TSX.V:SCZ) (the "Company" or "Santacruz")
announces that it has reached agreement with the Contracuña group
of companies ("Contracuña") to amend the payment terms of the
Contracuña Option Agreement. In addition, the Company has
reached agreement to amend the repayment terms of the US$ 2.3 million short-term loan ("the Loan") it
has with a private Bolivian mining company.
Contracuña Option Agreement
The Company and
Contracuña have agreed to amend the terms of the Option Agreement
(see press releases dated June 21 and
December 14, 2017) to acquire 100%
ownership of the Veta Grande Project, including the Veta Grande mine and milling facility as well
as the Minillas property located in Zacatecas, Mexico.
Details of the payment schedule per the amendment to the Option
Agreement are as follows:
1. US$500 paid on December 13, 2017 (paid);
2. US$100 on or before October 1, 2018;
3. US$100 on or before November 1, 2018;
4. US$750 on or before December 13, 2018;
5. US$1,400 on or before August 31, 2019;
6. US$3,000 on or before December 2, 2019;
7. US$3,000 on or before December 2, 2020;
8. US$4,000 on or before December 2, 2021; and
9. US$4,250 on or before December 2, 2022;
The October 1 and November 1, 2018 payments of $100 relate to amounts included in accounts
payable as at June 30, 2018 and
accordingly payment of these amounts will be offset by a reduction
in trade debt. The August 31, 2019
payment of $1.4 million is secured by
a promissory note issued by the Company to Contracuña and relates
to the reclassification of certain trade debt owing to
Contracuña. The referenced trade debt balance is included in
the Company's accounts as at June 30,
2018. All other terms of the Option Agreement remain
unchanged.
Short-term Loan Agreement
Santacruz has reached
agreement with the private Bolivian mining company holding the Loan
(see press release dated March 7,
2018) to amend the repayment terms. Pursuant to the amended
terms the principal balance of US$2.3
million is now to be repaid October
1, 2018 (previously July 1,
2018). In addition, effective July 1,
2018 the interest rate increases from 9% to 12% per annum.
Further, subject to TSX Venture Exchange approval, the Company has
agreed to extend to March 6, 2020 the
expiry date of 2,000,000 warrants previously issued to the
lender. The exercise price of the warrants remains unchanged
at $0.16 per share.
About Santacruz Silver Mining Ltd.
Santacruz is a
Mexican focused silver company with two producing silver projects
(Veta Grande Project and Rosario Project) and two exploration
properties (Minillas Property and Zacatecas Properties). The
Company's corporate objective is to become a mid-tier silver
producer.
"signed"
Arturo Préstamo Elizondo,
President and CEO
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Forward looking information
Certain statements contained in this news release constitute
"forward-looking information" as such term is used in applicable
Canadian securities laws. Forward-looking information is based on
plans, expectations and estimates of management at the date the
information is provided and is subject to certain factors and
assumptions. In making the forward-looking statements
included in this news release, the Company has applied several
material assumptions, that the Company's financial condition and
development plans do not change as a result of unforeseen events,
that third party mineralized material to be milled by the Company
will have properties consistent with management's expectations,
that the Company will receive all required regulatory approvals,
and that future metal prices and the demand and market outlook for
metals will remain stable or improve. Forward-looking
information is subject to a variety of risks and uncertainties and
other factors that could cause plans, estimates and actual results
to vary materially from those projected in such forward-looking
information. Factors that could cause the forward-looking
information in this news release to change or to be inaccurate
include, but are not limited to, the risk that any of the
assumptions referred to prove not to be valid or reliable, which
could result in lower revenue, higher cost, or lower production
levels; delays and/or cessation in planned work; changes in the
Company's financial condition and development plans; delays in
regulatory approval; risks associated with the interpretation of
data (including in respect of the third party mineralized material)
regarding the geology, grade and continuity of mineral deposits;
the possibility that results will not be consistent with the
Company's expectations, as well as the other risks and
uncertainties applicable to mineral exploration and development
activities and to the Company as set forth in the Company's
continuous disclosure filings filed under the Company's profile
at www.sedar.com. There can be no assurance that any
forward-looking information will prove to be accurate, as actual
results and future events could differ materially from those
anticipated in such statements. Accordingly, the reader should not
place any undue reliance on forward-looking information or
statements. The Company undertakes no obligation to update
forward-looking information or statements, other than as required
by applicable law.
Rosario Project
The decisions to commence production at the Rosario Mine,
Cinco Estrellas Property and Membrillo Prospect were not based on a
feasibility study of mineral reserves demonstrating economic and
technical viability, but rather on a more preliminary estimate of
inferred mineral resources. Accordingly, there is increased
uncertainty and economic and technical risks of failure associated
with this production decision. Production and economic variables
may vary considerably, due to the absence of a complete and
detailed site analysis according to and in accordance with NI
43-101.
Veta Grande Project
The decision to commence production at Veta Grande Project
was not based on a feasibility study on mineral reserves
demonstrating economic and technical viability. Accordingly,
there is increased uncertainty and economic and technical risks of
failure associated with this production decision. Production
and economic variables may vary considerably due to the absence of
a complete and detailed site analysis according to and in
accordance with NI 43-101.
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SOURCE Santacruz Silver Mining Ltd.