VANCOUVER, Nov. 24, 2015 /PRNewswire/ - Santacruz Silver Mining Ltd. ("Santacruz" or the "Company") (TSX.V:SCZ) announces that the Company has agreed in principle to terms whereby it will receive US$9.5 million under a senior secured loan facility (the "Loan Facility") with a lender syndicate (the "CrediPresto Syndicate") headed by CrediPresto Group ("CrediPresto") and including two other institutions.
Proceeds from the Loan Facility will be used to restructure the obligations owing by the Company to JMETLLC ("JMET") under the Pre-Paid Forward Silver Purchase Agreement (the "Pre-Paid Agreement") between Santacruz and its affiliates and JMET. The proposed terms of the Loan Facility will provide for a deferral of principal repayments which should allow the Company to solidify its balance sheet during current market conditions and should return the Company to a positive working capital position.
A summary of the terms of the Loan Facility is as follows:
- US$9,500,000 loan payable to the CrediPresto Syndicate, bearing interest at 15%, payable quarterly in arrears, with principal repayments to be made in equal quarterly installments during the third year after closing, subject to the requirement to make pre-payments if certain funds are received by the Company.
- A fee of 6% of the gross proceeds of the Loan Facility will be payable to CrediPresto. The Company will also issue 6,900,000 warrants to CrediPresto. Each warrant will allow CrediPresto to purchase one common share of the Company at a price of $0.15 per share for a period of four years. If the Company's shares trade at or above $0.30 per share, then 3,450,000 of the warrants will have an accelerated expiry date of two years.
Assuming the transaction closes, the remaining contracts under the price protection program established under the Pre-Paid Agreement will be liquidated and the Company will issue two notes to JMET. As of the date of this announcement it is anticipated the amount of the notes should not exceed an aggregate US$ 3 million, however, such amount is subject to the final value of the liquidated price protection contracts.
Arturo Préstamo, President and Chief Executive Officer, stated: "We are very pleased to have come to terms with Credipresto for the replacement and restructuring of our long-term debt. The Loan Facility should allow the Company to substantially improve its working capital position. Arturo Préstamo continued, "We arevery pleased to have CrediPresto as our new financing partner. CrediPresto brings expertise in the mining industry as well as strong business relationships in Mexico. These attributes will translate into a solid financing partner for Santacruz. The terms of the Loan Facility will allow us to move forward with more confidence that the Company can meet its debt obligations now that we have the Rosario Mine back in full production and the recently acquired Veta Grande Project coming online."
The Loan Facility and restructuring are subject to a number of closing conditions applicable and acceptable to the parties to the new and existing agreements, including TSX Venture Exchange approval. Closing is anticipated to occur by the end of the year.
About Santacruz Silver Mining Ltd.
Santacruz is a Mexican focused silver company with a producing silver mine (Rosario); the right to operate a silver mine and mill facility (Veta Grande); an advanced-stage project (San Felipe) and an exploration project (Gavilanes). 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 the parties' obligations to JMET and the Loan Facility, timing of closing of the restructure with JMET and the Loan Facility, the Company's production and development plans for its mineral properties, and its corporate objectives, 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 closing of the restructure with JMET and the Loan Facility proceed as planned or at all, future metal prices and that the demand and market outlook for metals do not decline significantly. 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 closing of the restructure with JMET and closing of the Loan Facility do not proceed as planned or at all, 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 and other continuous disclosure filings 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.
Financial outlook information contained herein about the Company's prospective financial position is based on assumptions about future events, as described above, based on management's assessment of the relevant information currently available. The purpose of such financial outlook is to provide information about management's current expectations as to the anticipated results of its proposed business activities. Readers are cautioned that any such financial outlook information contained herein should not be used for purposes other than for which it is disclosed herein.
SOURCE SantaCruz Silver Mining Ltd.