Wednesday, October 13, 2021


Santacruz to Purchase Glencore’s Producing Silver Mines in Bolivia Making a New Important Latin American based mostly Silver Producer

Vancouver, British Columbia–(Newsfile Corp. – October 13, 2021) – Santacruz Silver Mining Ltd. (TSXV: SCZ) (the “Firm” or “Santacruz“) publicizes…

By Staff , in Silver , at October 13, 2021


Vancouver, British Columbia–(Newsfile Corp. – October 13, 2021) – Santacruz Silver Mining Ltd. (TSXV: SCZ) (the “Firm” or “Santacruz“) publicizes that it has entered right into a definitive share buy settlement (the “Settlement“) with Glencore whereby Santacruz will purchase a portfolio of Bolivian silver belongings from Glencore (the “Transaction“), together with a forty five% curiosity within the producing Bolivar and Porco mining operations held via an unincorporated three way partnership with Corporación Minera de Bolivia (“COMIBOL“), a Bolivian state-owned entity, (the “Illapa JV“), a 100% curiosity within the Sinchi Wayra enterprise which incorporates the manufacturing Caballo Blanco mining complicated (“Caballo Blanco“), the Sorocaya venture positioned in Bolivia (“Soracaya“) and the San Lucas ore sourcing and buying and selling enterprise (“San Lucas“) and sure associated properties and belongings (collectively, the “Property“). Pursuant to the Settlement, Santacruz pays preliminary upfront consideration of US$20 million (topic to customary working capital changes), and a further US$90MM is payable in equal installments over 4 years from the closing of the Transaction, topic to sure circumstances and changes. As well as, Glencore will even be granted a 1.5% web smelter returns royalty on the Property.

Key Transaction Highlights

  • Creation of a big Americas-focused silver producer approaching senior standing, with extra vital leverage to the zinc market

  • Diversifies manufacturing throughout a sturdy portfolio of manufacturing mines and creates a platform for future development

  • Property embody 5 producing mines, two exploration initiatives, three milling services, one buying and selling firm and two energy vegetation (thermo and hydroelectric) among the many most related

  • For the 9 months ended September 30, 2021, the Property produced 6.4MM ozAg Eq[1] (100% foundation)

  • Instantly accretive to money circulate and all key metrics

  • Majority of consideration deferred and to be funded by money flows leading to restricted upfront dilution in comparison with an all-share transaction

Arturo Préstamo Elizondo, Government Chairman and Interim CFO of Santacruz, commented: “This can be a transformational acquisition that creates a number one mid-tier silver producer within the Americas. The Transaction represents a singular alternative to considerably improve our portfolio of operations – it’s extremely accretive on all key metrics and the transaction construction permits the Firm to finance nearly all of the acquisition by way of the money circulate generated by these Property.” Mr. Prestamo continued; “Santacruz shareholders will take part in a bigger, extra various silver producer with robust manufacturing development and enhanced money circulate profile. We sit up for working in Bolivia and partnering with COMIBOL to generate worth for all stakeholders.

Carlos Silva, Chief Government Officer commented: “We’re more than happy to workforce up with an amazing group of pros in Bolivia. Glencore has carried out extraordinary work on these belongings whereas attaining very excessive requirements by way of accountable mining practices and their dedication to accountable enterprise and neighborhood relations.” Mr. Silva continued; “We are going to make sure that this wonderful legacy continues as we function the initiatives within the coming years.”

Overview of the Property

Bolivar (45% owned by Glencore)

  • Underground silver-zinc-lead mine positioned in Antequera close to Oruro Metropolis, which was first mined in 1810

  • 45% curiosity in Bolivar via the Illapa JV with COMIBOL (55%)

  • Processing at a 1,200 tpd plant utilizing differential flotation course of to pay attention zinc, lead and silver minerals

  • Historic Mineral Reserves and Assets[2] (JORC Compliant; Mineral Assets are inclusive of Mineral Reserves proven at 100% possession):

Class

Tonnes
(Mt)

Silver
(g/t)

Zinc
(%)

Lead
(%)

Proved Ore Reserves

0.8

251

9.4%

1.1%

Possible Ore Reserves

0.7

215

8.6%

0.9%

Measured Mineral Assets

1.4

308

12.7%

1.4%

Indicated Mineral Assets

1.0

283

12.2%

1.3%

Inferred Mineral Assets

5.4

350

9.0%

0.9%

Porco (45% owned by Glencore)

  • Positioned 50 km southwest of Potosí Metropolis in Antonio Quijarro province comprised of two underground mining sectors: Central and Hundimiento

  • 45% curiosity in Porco via the Illapa JV with COMIBOL (55%)

  • Processing at a 1,200 tpd concentrator plant

  • Historic Mineral Reserves and Assets[3] (JORC Compliant; Mineral Assets are inclusive of Mineral Reserves proven at 100% possession):

Class

Tonnes
(Mt)

Silver
(g/t)

Zinc
(%)

Lead
(%)

Proved Ore Reserves

0.1

67

8.9%

0.4%

Possible Ore Reserves

0.1

104

7.8%

0.5%

Measured Mineral Assets

0.7

83

10.7%

0.6%

Indicated Mineral Assets

0.4

114

10.9%

0.8%

Inferred Mineral Assets

2.2

98

11.8%

0.8%

Caballo Blanco (100% owned by Glencore)

  • Underground mining complicated positioned in Potosí comprised of three working mines: Colquechaquita, Tres Amigos and Reserva

  • Processing on the Don Diego processing plant (present capability of 1,000 tpd) which makes use of the flotation technique to acquire zinc-silver and lead-silver ore concentrates

  • Additionally contains thermo and hydroelectric energy technology services

  • Lengthy monitor document of manufacturing with the mines in operation since 1988 (Colquechaquita) and 1996 (Reserva, Tres Amigos)

  • Historic Mineral Reserves and Assets[4] (JORC Compliant; Mineral Assets are inclusive of Mineral Reserves):

Class

Tonnes
(Mt)

Silver
(g/t)

Zinc
(%)

Lead
(%)

Proved Ore Reserves

0.9

234

7.3%

2.3%

Possible Ore Reserves

0.6

194

7.6%

1.8%

Measured Mineral Assets

0.9

364

13.7%

3.7%

Indicated Mineral Assets

0.6

318

13.1%

3.2%

Inferred Mineral Assets

2.3

241

12.2%

2.4%

Soracaya Venture (100% owned by Glencore)

  • Greenfield venture in Potosí, Bolivia, 7 km south of the city of San Ramon

  • The Soracaya venture is located 4.4 km alongside strike from Pan American Silver Corp.’s San Vicente mine and types a part of the identical mineralized system

San Lucas Ore Sourcing & Buying and selling Enterprise (100% owned by Glencore)

  • Third get together ore sourcing enterprise formally established in 2017

  • Generates most of its revenue by sourcing ore from third events, earlier than processing it via vegetation at Bolivar, Porco and Caballo Blanco (Don Diego plant), after which promoting the produced focus

Historic Useful resource Estimates – Bolivar, Porco and Caballo Blanco

Glencore reviews assets and reserves in accordance with the 2012 version of the Australasian Code for Reporting of Exploration Outcomes, Mineral Assets and Ore Reserves (JORC Code), the 2016 version of the South African Code for Reporting of Mineral Assets and Mineral Reserves (SAMREC) and the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Requirements on Mineral Assets and Reserves (2014 version). The time period ‘Ore Reserves’, as outlined in Clause 28 of the JORC Code, has the identical that means as ‘Mineral Reserves’ as outlined within the CIM Definition Requirements for Mineral Assets and Mineral Reserves. All tonnage data has been rounded to mirror the relative uncertainty within the estimates; there might due to this fact be small variations within the totals. The Measured and Indicated assets are reported inclusive of these assets modified to provide reserves, except in any other case famous. Commodity costs and trade charges used to determine the financial viability of reserves are based mostly on long-term forecasts utilized on the time the reserve was estimated.

Glencore’s Assets & Reserves report as at December 31, 2020 disclosed Bolivar, Porco and Caballo Blanco mineral useful resource statements in addition to mineral reserve estimates as of December 31, 2020, which stay present for Glencore as of the date hereof. In accordance with Nationwide Instrument 43-101 – Requirements of Disclosure for Mineral Initiatives (“NI 43-101“), the Bolivar, Porco and Caballo Blanco historic mineral useful resource and mineral reserve estimates use the phrases “mineral useful resource”, “inferred mineral useful resource”, “indicated mineral useful resource” and “measured mineral useful resource” together with “possible reserve” and “confirmed reserve” having the identical meanings ascribed to these phrases by the Canadian Institute of Mining, Metallurgy and Petroleum, because the CIM Definition Requirements on Mineral Assets and Mineral Reserves adopted by CIM Council, as amended. Because the mineral useful resource and mineral reserve estimates pre-date Santacruz’s settlement to amass the Property, Santacruz is treating them as “historic estimates” beneath NI 43-101, however they continue to be related as the latest mineral useful resource and reserves estimates for Bolivar, Porco and Caballo Blanco. Additional drilling and useful resource modelling could be required to improve or confirm these historic estimates as present mineral assets or reserves for the respective belongings and accordingly, they need to be relied upon solely as a historic useful resource and reserve estimate of Glencore, which pre-dates Santacruz’s settlement to amass the Property. A Santacruz “Certified Individual” beneath NI 43-101 has not finished enough work to categorise the historic estimate as present Mineral Assets or Mineral Reserves and Santacruz isn’t treating the historic estimate as present Mineral Assets or Mineral Reserves. The Firm has engaged JDS Power & Mining Inc. (“JDS“) to validate and confirm the historic assets. JDS accomplished its website visits in August 2021.

The Firm has retained Mr. Garth Kirkham, P.Geo., who’s a Certified Individual as outlined by NI 43-101, to overview the disclosure of the Firm’s historic mineral assets and reserves. Mr. Kirkham is an worker of Kirkham Geosystems Ltd. and is impartial of the Firm beneath NI 43-101.

Transaction Abstract

Pursuant to the Settlement, Santacruz will purchase all of Glencore’s properties, belongings and companies associated to the Property by buying varied Glencore subsidiaries. The consideration for the Transaction will probably be payable via upfront consideration of US$20 million in money on closing (topic to customary working capital changes) (the “Closing Money Fee“), and deferred consideration of US$90 million secured towards the Property. The deferred consideration consists of money funds of US$22.5 million payable on every anniversary of the time limit for 4 years and is topic to sure accelerated cost options based mostly on money flows and silver and zinc costs (the “Deferred Consideration Quantity“). Glencore will even retain a 1.5% web smelter returns royalty on the Property (the “Royalty“) and can have a proper to amass 100% of the offtake from the Property on market phrases to be set forth in definitive agreements to be entered into at closing.

The closing of the Transaction is topic to a lot of closing circumstances, which embody, however will not be restricted to:

  • the getting into into of sure definitive agreements with Glencore with respect to the Deferred Consideration Quantity, the Royalty and sure offtake rights in favour of Glencore;

  • acquiring approval from the TSX Enterprise Trade (the “TSXV“); and

  • customary closing circumstances set forth within the Settlement.

The Settlement has been authorized by Santacruz’s Board of Administrators. Maxit Capital LP has offered an opinion to the Santacruz Board of Administrators stating that, based mostly upon and topic to the assumptions, limitations, and {qualifications} set forth therein, the consideration to be paid by Santacruz to Glencore pursuant to the Transaction is truthful, from a monetary perspective, to Santacruz.

Timetable and Subsequent Steps

It’s anticipated that the closing of the Transaction will happen throughout This autumn 2021. Within the coming months, Santacruz will probably be targeted on the next actions:

  • Completion of acquisition financing for the Closing Money Fee, the phrases of that are to be decided and will probably be disclosed when identified to the Firm;

  • Completion of all different circumstances precedent to closing of the Transaction; and

  • Completion of a Nationwide Instrument 43-101 technical report on the related Property to be filed in the end.

Advisors

Maxit Capital LP is appearing as monetary advisor to Santacruz with DuMoulin Black LLP appearing because the Firm’s authorized counsel.

In reference to the Transaction, the Firm has entered right into a consulting providers settlement with Large Buck Capital, S.C. (“BBC“) pursuant to which the Firm has agreed to pay to BBC a payment equal to US$1,320,000, being 1.2% of the Transaction worth (the “Success Charge“). US$320,000 of the Success Charge will probably be payable in money over six months from the signing of the Settlement and US$1,000,000 will probably be payable in widespread shares of the Firm upon closing of the Transaction. The deemed problem worth and variety of shares to be issued shall be decided based mostly available on the market worth of the Firm’s widespread shares on the time of issuance, topic to TSXV acceptance.

About Santacruz Silver Mining Ltd.

Santacruz is a Mexican targeted silver firm with one producing silver venture (Zimapan) and two exploration properties, the La Pechuga property and Santa Gorgonia prospect. The Firm is managed by a technical workforce of pros with confirmed monitor data in creating, working and discovering silver mines in Mexico. Our company goal is to change into a mid-tier silver producer.

‘signed’

Arturo Préstamo Elizondo,
Government Chairman and Interim CFO

For additional data please contact:

Arturo Prestamo
Santacruz Silver Mining Ltd.
E mail: [email protected]
Phone: (604) 569-1609

Neither the TSX Enterprise Trade nor its Regulation Providers Supplier (as that time period is outlined within the insurance policies of the TSX Enterprise Trade) accepts accountability for the adequacy or accuracy of this launch.

Ahead Trying Info

Sure statements contained on this information launch represent “forward-looking data” as such time period is utilized in relevant Canadian securities legal guidelines, together with statements regarding: the anticipated advantages of the Transaction; the closing of the Transaction, together with the anticipated timing thereof; the satisfaction of all circumstances to closing the Transaction together with, with out limitation, acquiring all mandatory consents and approvals; the Firm’s plan to organize a technical report on the related Property; the Firm’s plans to acquire financing to finish the Transaction; the accuracy of estimated mineral assets, anticipated outcomes of future exploration; forecast future metallic costs, expectations that environmental, allowing, authorized, title, taxation, socio-economic, political, advertising or different points won’t materially have an effect on estimates of mineral assets; and manufacturing on the Bolivar and Porco mining operations, Caballo Blanco and Soracaya and the Firm’s plans to develop it.

Ahead-looking data relies on plans, expectations and estimates of administration on the date the data is offered and is topic to sure elements and assumptions. In making the forward-looking statements included on this information launch, the Firm has utilized a number of materials assumptions, together with that the Firm’s monetary situation and growth plans don’t change because of unexpected occasions and that future metallic costs and the demand and market outlook for metals will stay steady or enhance. Ahead-looking data is topic to quite a lot of dangers and uncertainties and different elements that would trigger plans, estimates and precise outcomes to differ materially from these projected in such forward-looking data. Components that would trigger the forward-looking data on this information launch to alter or to be inaccurate embody, however will not be restricted to: the chance that any of the assumptions referred to above show to not be legitimate or dependable; market circumstances and volatility and international financial circumstances, together with elevated volatility and doubtlessly unfavorable capital elevating circumstances ensuing from the continued or escalation of the COVID-19 pandemic and dangers regarding the extent and period of such pandemic and its impression on international markets; controls or rules and political or financial developments in Bolivia; threat of delay and/or cessation in deliberate work or modifications within the Firm’s monetary situation and growth plans; dangers related to the Firm with the ability to safe financing to shut the Transaction; dangers related to the interpretation of knowledge (together with in respect of third get together mineralized materials) relating to the geology, grade and continuity of mineral deposits; the uncertainty of the geology, grade and continuity of mineral deposits and the chance of sudden variations in mineral assets, grade and/or restoration charges; dangers associated to gold, silver, base metallic and different commodity worth fluctuations; worker relations; relationships with and claims by native communities and indigenous populations; availability and rising prices related to mining inputs and labour; the speculative nature of mineral exploration and growth, together with the dangers of acquiring mandatory licenses and permits and the presence of legal guidelines and rules that will impose restrictions on mining; dangers regarding environmental regulation and legal responsibility; the chance that outcomes won’t be in line with the Firm’s expectations, in addition to the opposite dangers and uncertainties relevant to mineral exploration and growth actions and to the Firm as set forth within the Firm’s steady disclosure filings filed beneath the Firm’s profile at www.sedar.com.

There may be no assurance that any forward-looking data will show to be correct, as precise outcomes and future occasions might differ materially from these anticipated in such statements. Accordingly, the reader mustn’t place any undue reliance on forward-looking data or statements. The Firm undertakes no obligation to replace forward-looking data or statements, apart from as required by relevant regulation.

1 Manufacturing of two.7MM ozAg, 30kt Zn and 4kt Pb. Ag Eq calculated utilizing metallic costs of (US$): Ag-$25.66/oz, Zn-$1.31/lb and Pb-$0.98/lb.

[2] Reported reserves and assets are based mostly on Glencore’s Assets & Reserves report as at 31 December 2020 (see https://www.glencore.com/dam/jcr:3c05a365-e6ae-4c1a-9439-960249a42e35/GLEN_2020_Resources_reserves_report.pdf for particulars).

[3] Reported reserves and assets are based mostly on Glencore’s Assets & Reserves report as at 31 December 2020 (see https://www.glencore.com/dam/jcr:3c05a365-e6ae-4c1a-9439-960249a42e35/GLEN_2020_Resources_reserves_report.pdf for particulars).

[4] Reported reserves and assets are based mostly on Glencore’s Assets & Reserves report as at 31 December 2020 (see https://www.glencore.com/dam/jcr:3c05a365-e6ae-4c1a-9439-960249a42e35/GLEN_2020_Resources_reserves_report.pdf for particulars).

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