VANCOUVER, Oct. 2, 2014 /CNW/ - Santacruz Silver Mining Ltd. ("Santacruz" or the "Company") (TSX.V:SCZ) is pleased to announce that it has finalized and closed the US$28.4 million Pre-paid Silver Purchase Agreement with JMET, LLC ("the Agreement") previously announced on September 18, 2014. The funds will be used to advance the development of the Company's second project, San Felipe, in Sonora State, Mexico.
Pursuant to the terms of the Agreement, the Company has agreed to sell 4,635,000 ounces of silver through August 2019, subject to certain adjustments relating to metal prices. 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. Under the Agreement, the Company always maintains the upside on the silver and all metal prices.
With the closing of this funding now completed, the Company intends to advance the development of the San Felipe project with the expectation of being in position to take a construction decision by the end of Q1 2015. The Company recently announced a Preliminary Economic Assessment on the San Felipe Project with robust economics. (See press release dated September 11, 2014)
President Arturo Préstamo stated "Given the very difficult market conditions we are currently experiencing, we are very pleased to have entered into the Agreement which will allow us to continue with our plans to create a mid-tier silver producer in Mexico." Mr. Préstamo continued, "This non-dilutive approach gives the Company flexibility and also a comfortable re-payment schedule."
The Company wishes to clarify its press release of September 4, 2014, relating to the amendment of its agreement with Minera Hochschild Mexico S.A. de C.V. ("Hochschild") regarding the San Felipe project. Under the amended agreement, Santacruz is not obligated to pay Hochschild any amount from an offering completed by the Company, but is required to pay Hochschild 30% of any capital increase in its Mexican subsidiary Impulsora Minera Santacruz at any time during the life of the agreement.
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.
Arturo Préstamo Elizondo,
President, Chief Executive Officer and Director
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, such as planned production levels, future development and a potential construction decision in respect of the San Felipe project, 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, including, that the Company's financial condition and development plans do not change as a result of unforeseen events, that the Company obtains required regulatory approvals, future metal prices and the demand and market outlook for metals. 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, that unforeseen events result in delays, or cessation in planned work, that the Company's financial condition and development plans change, delays in regulatory approval, risks associated with the interpretation of data, 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 Annual Information Form 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.
SOURCE: SantaCruz Silver Mining Ltd.
For further information: Neil MacRae, Santacruz Silver Mining Ltd., Email: [email protected], Telephone: (604) 569-1609