GSilver Raises Debt and Equity Financing to US$15.3M


VANCOUVER, BC /ACCESSWIRE/July 7, 2022/ Guanajuato Silver Company Ltd. (the “Company” Where “GSilver“) (TSXV: GSVR) announces that due to increased demand, the Company has increased the size of its private placement financing through a previously announced broker (the “Funding“) through a syndicate of agents including Research Capital Corporation and Canaccord Genuity Corp. as co-managers and co-bookrunners (collectively the “Officers“) (see GSilver June 29, 2022, press release – GSilver to acquire 100% of Great Panther’s Mexican mining assets). The Funding will now consist of an aggregate of up to 40,300,000 subscription receipts (the “Subscription receipts“) at a price of CA$0.33 (equivalent to approximately US$0.256) per Subscription Receipt for gross proceeds of up to CA$13,299,000 (equivalent to approximately US$10.3 million), subject to the Agents’ option to increase the size of the Financing by up to an additional 15% or 6,045,000 Subscription Receipts at any time up to 48 hours prior to the closing of the Financing.

The gross proceeds of the Funding, less 50% of the Agents’ cash commission, will be deposited in escrow (the “Escrowed Funds“) pending satisfaction of certain conditions for the release of the Subscription Receipts (the “SR terms“), including the concurrent closing of the Company’s acquisition of the Mexican mining assets of Great Panther Mining Limited (the “MMR acquisition“) as announced on June 29, 2022 (see “Purchase of Great Panther MMR Mining Assets” below) and TSX Venture Exchange acceptance (the “TSXV“).

Upon closing of the MMR Acquisition, each Subscription Receipt will be automatically converted, without payment of additional consideration or further action by the holder thereof, into one unit of GSilver consisting of one common share (one “GSilver Share“) and one common share purchase warrant (a “Money warrant“) of GSilver and the escrow funds (less the balance of cash commission and agent’s expenses) will be returned to the Company. Each GSilver warrant will be exercisable for one share of GSilver at a price of 0. CA$50 for a period of 36 months following If the SR Conditions are not satisfied within 90 days of the closing of the Financing (or such other date agreed by the Company and the Agents), the Escrowed Funds and any accrued interest on these will be returned to purchasers of Subscription Receipts and the Subscription Receipts will be cancelled.

The net proceeds from the financing will be used, among other things, to fund the purchase price of the MMR acquisition, fund ongoing mining operations and for general corporate and working capital purposes.

The Financing is expected to close around the week of July 21, 2022, or such other date as the Company and the Agents agree.

Purchase of Great Panther MMR assets:

GSilver has signed a binding definitive agreement with Great Panther Mining Ltd. (“Big Panther“) (TSX:GPR) to acquire all of Great Panther’s Mexican mining assets through the purchase of Great Panther’s Mexican subsidiary, Minera Mexicana Rosario SA de CV (“MMRMMR’s combined Mexican assets include three mines, including the currently producing Topia mine in Durango, two flotation processing facilities and 25,000 hectares of mining concessions. MMR’s purchase price is $14.7 million. US dollars, of which US$6.7 million is payable in GSilver and, subject to certain closing adjustments, US$8,000,000 is payable in cash The Company has also agreed to pay certain contingent bonuses to Great Panther based on future silver production from MMR’s mining assets and the future price of silver. See GSilver’s press release dated June 29, 2022 for further details on the MMR acquisition. The Company has also agreed to pay, subject to TSXV’s acceptance, an advisory fee to MinVisory Corp. based on TSXV authorized limits for its services in connection with the acquisition of MMR MinVisory Corp. is a private consulting firm based in Ontario. The closing of the MMR acquisition is subject to a number of conditions, including acceptance by the TSXV.

As announced on June 29, 2022, GSilver has also signed a Concentrate Prepayment Facility Term Sheet (the “PO facility“) with Ocean Partners (UK), a metal removal and trading company, to provide financing of US$5.0 million on the purchase price of MMR and for general corporate purposes and working capital The OP Facility will be for a 24 – month term, secured by a pledge of shares in MMR, which holds Great Panther’s Mexican mining assets, and repayable over a 21-month period after a three-month grace period Interest on the OP Facility will be calculated at 12-month LIBOR + 7.5 For further details on the OP Facility, please refer to GSilver’s press release dated June 29, 2022.

All securities issuable under the MMR Acquisition, Financing and OP Facility will be subject to a statutory hold period of 4 months and one day from the date of issue. There can be no assurance that the MMR Acquisition, Financing and OP Facility will be completed on the terms contemplated by the Company or at all.

About Guanajuato Silver Company Ltd. :

GSilver extracts and processes silver and gold concentrates from its El Cubo mine and mill. The Company continues to delineate additional silver and gold resources by underground drilling at El Cubo and its neighboring El Pinguico project. Both projects are located within 11 km of the city of Guanajuato, Mexico, which has an established mining history of 480 years.

“James Anderson”
President and CEO

For more information about Guanajuato Silver Company Ltd., please contact:

JJ Jennex, Communications Manager, +1 (604) 723-1433
Email: [email protected]
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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.

This new press release does not constitute an offer to sell or a solicitation of an offer to buy securities in the United States. The securities have not been and will not be registered in the name United States Securities Act of 1933, as amended (the “U.S. Securities Law“), or any state securities law and may not be offered or sold in the United States or to or for the account or benefit of a United States Person (as defined in Regulation S under U.S. securities law) unless registered under U.S. securities law and applicable state securities laws or an exemption from such registration is available.

Forward-looking information and statements

This press release contains certain forward-looking statements and information, which relate to future events or future performance, including, but not limited to, the acquisition of MMR on the proposed terms and conditions and the estimated timing for its closing and GSilver’s ability to raise the necessary funds to complete the acquisition of MMR, including financing and the OP Facility on the terms and conditions and in the amounts currently contemplated. These forward-looking statements reflect the managements current beliefs and are based on assumptions made by the Company and information currently available to it. Readers are cautioned that these forward-looking statements are neither promises nor guarantees, and are subject to risks and uncertainties that may cause future results to differ materially from those expected, including, but not limited to, market conditions, availability of financing, exchange rate fluctuations, actual results of exploration, development and production activities, unanticipated geological formations and features, environmental risks, future prices of gold, silver and other metals, operating risks, accidents, labor issues, delays in obtaining governmental or regulatory approvals and permits, and other risks in the mining industry. There can be no assurance that GSilver will successfully fund and complete the acquisition of MMR on the contemplated terms or at all. Additionally, there is uncertainty about the continued spread of COVID-19, the ongoing war in Ukraine, rising inflation and interest rates (domestically and abroad), and the impact they will have on company operations, supply chains, ability to access MMR properties, El Cubo and/or El Pinguico or procure equipment, contractors and other members of the personnel or raise capital in a timely manner or not at all and economic activity in general. All forward-looking statements and information contained in this press release are qualified by these cautionary statements and those contained in our continuous disclosure documents available on SEDAR at Forward-looking statements and information are made as of the date hereof, and the Company undertakes no obligation to update or revise them to reflect new events or circumstances, except as required by law.

THE SOURCE: Guanajuato Silver Company Ltd.

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Carol M. Barragan