Auxico Closes Private Placement

MONTREAL, July 27, 2020 /CNW Telbec/ - Auxico Resources Canada Inc. (CSE: AUAG) is pleased to announce that it has completed a non-brokered private placement, raising aggregate gross proceeds of $50,000 in participating convertible debentures (the "Debentures"). 

Each Debenture consists of $1 principal amount of participating, secured, non-redeemable 10% convertible debenture maturing on July 24, 2023 (the "Maturity Date") and convertible at the option of the Debenture holder into:

(i)	units ("Units") of the Company that is equal to the principal amount of each Debenture being converted at a deemed price of $0.10 per Unit. Each Unit is comprised of one common share ("Share") in the capital of the Company and one warrant ("Warrant"). Each Warrant is exercisable into one Share at a price of $0.15 for a period of three years from the date of issuance; or
(ii)	the number of common shares of Central America Nickel Inc. ("CAN") (a private company based in Montreal, Canada) at a conversion price of $1.00 per CAN share; and
(iii)	a cash payment equal to the principal amount and an amount corresponding to the interest that such holder would receive if the holder held the Debenture from the date of conversion until the Maturity Date.

Interest at a rate of 10% per annum will be paid to Debenture holders semi-annually in arrears.

In addition, Debenture holders will receive a total of 16% of the net profits generated by Auxico from the sale of tantalum and niobium-bearing ores, to be paid quarterly in arrears; this represents 1% of the profits for every $100,000 principal amount of Debentures ("Participating Feature"). As previously announced in its news release of June 3, 2020, the Company has entered into a joint venture with Kibara Minerals in the Democratic Republic of the Congo in this regard, and Auxico's share of the profits will be 70%. The Participating Feature well apply to any profits generated for Auxico from this joint venture, as well as from other jurisdictions (such as Brazil). This Participating Feature will expire on the earlier of the conversion of the Debentures into Shares of the Company, and the Maturity Date.

The net proceeds of the private placement will be used to begin trading of tantalum and niobium-bearing ores from the Democratic Republic of the Congo and Brazil, as well as for general working capital purposes.

About Auxico Resources Canada Inc.

Auxico Resources Canada Inc. ("Auxico") is a Canadian company that was founded in 2014 and based in Montreal.  Auxico is engaged in the acquisition, exploration and development of mineral properties in Colombia, Brazil, Mexico and the Democratic Republic of the Congo.

Additional information on Auxico can be found on the Company's website (www.auxicoresources.com) or on SEDAR (www.sedar.com) under "Auxico Resources Canada Inc."

ON BEHALF OF THE BOARD OF DIRECTORS

The Canadian Securities Exchange (CSE) has not reviewed and does not accept responsibility for the adequacy or the accuracy of the contents of this release.

SOURCE Auxico Resources Canada Inc.

Pierre Gauthier, CEO, Auxico Resources Canada Inc., [email protected], Cell: [phone]; Mark Billings, President, Auxico Resources Canada Inc., [email protected], Cell: [phone]