Vancouver, B.C. – Santacruz Silver Mining Ltd. (“Santacruz” or the “Company”) (TSX.V:SCZ) is pleased to announce that it has entered into a US$28.4 million Pre-paid Silver Purchase Agreement with JMET, LLC to sell 4,635,000 ounces of silver through August 2019, subject to certain adjustments relating to metal prices. In addition to US$ 28.4 million that will be paid to the Company up front upon satisfaction of certain conditions, at the time of each delivery the Company will receive an amount per ounce of silver equal to the market price at the time, less a fixed discount. It is anticipated that the upfront payment will be advanced within the next two weeks. Under the agreement, the Company maintains the upside on the silver price.
The main purpose of the agreement is to fund the Company’s future plans, including the development of the Company’s second project, San Felipe, in Sonora State, Mexico.
Key aspects of the Pre-paid Forward Silver Purchase Agreement:
- 5-year tenor
- No ounces will be delivered over the first 12 months followed by deliveries of 7,500 oz of silver per month for 18 months and 150,000 oz of silver per month for 30 months
- Attractive cost of capital
- Santacruz Silver maintains 100% upside on silver and all metal prices
- No warrants, shares or options are being issued in connection with the agreement
- Pledging of the Company’s assets as security for the up-front payment
President Arturo Préstamo stated, “We are very pleased to have entered into this contract. The funding allows us to continue our plans to advance the San Felipe project in a non-dilutive way, under a flexible and favorable financial structure while at the same time maintaining the upside on the price of silver. With the Rosario Mine starting to hit its targets, robust economics at our San Felipe project, and this non-dilutive financing now in place, we are well positioned to take the next step in becoming a mid-tier silver producer. Our approach has always been and will continue to be about creating strong cash-flow producing operating mines. That is always the key driver behind our decisions and we strive to deliver for our shareholders on those objectives in the shortest time frame possible.”
About Santacruz Silver Mining Ltd.
Santacruz is a Mexican-focused silver company with a producing mine (Rosario); two advanced-stage projects (San Felipe and Gavilanes) and an early-stage exploration project (El Gachi). The Company is managed by a technical team of professionals with proven track records in developing, operating and discovering silver mines in Mexico. Our corporate objective is to become a mid-tier silver producer.
‘signed’
Arturo Préstamo Elizondo,
President, Chief Executive Officer and Director
For further information please contact:
Neil MacRae
Santacruz Silver Mining Ltd.
Email: nmacrae@santacruzsilver.com
Associated File: http://www.santacruzsilver.