REG - Guanajuato Silver Co - US$5m Debt Facility

Guanajuato SilverAnnouncement

08/12/2022 13:30

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RNS Number : 0901J  Guanajuato Silver Company Ltd.  08 December 2022

8 December 2022

 

Guanajuato Silver Company Ltd

("Guanajuato Silver" or the "Company")

 

US$5m Debt Facility

 

 

Guanajuato Silver Company Ltd. (TSXV:GSVR) (OTCQX:GSVRF) (AQSE:GSVR), a
precious metals producer in Mexico, is pleased to announce that it has signed
a new concentrate and pre-payment credit facility with Ocean Partners (UK)
Limited ("Ocean Partners"), a UK based metals offtake and trading firm, to
provide a US$5.0M revolving credit facility (the "New Facility") for operating
and working capital purposes. The New Facility is in addition to the Company's
existing US$5.0M credit facility advanced by Ocean Partners in August 2022
(see Guanajuato Silver's previous news release dated August 30, 2022 -
"Guanajuato Silver Draws US$5,000,000 Credit Facility
(https://gsilver.com/news/2022c/793-ilverlosesversubscribedquityinancingof1072220220721)
").

 

Chairman & CEO, James Anderson said, "Ocean Partners has consistently
demonstrated their resolute support for Guanajuato Silver and our vision to
build the next mid-tier silver producer in Mexico. This debt facility will
strengthen our balance sheet and provide us with additional flexibility as we
continue to ramp up precious metals production at our four producing mines."

 

The New Facility will be revolving in nature, secured by a share and asset
pledge over the Company's Mexican subsidiary, Minera Mexicana El Rosario S.A.
de C.V. ("MMR"), and re-payable and re-drawable in 4-month intervals over a
term of 24 months.  Interest will be calculated at 12-month SOFR + 7.5%.  A
portion of the New Facility will be used to extinguish approximately
US$750,000 of existing debt, which represents the final amount owing to Ocean
Partners on the Company's first prepayment financing facility of US$1.5M drawn
in September, 2021 (see Guanajuato Silver news release dated September 23,
2021 - "Guanajuato Silver
(https://gsilver.com/news/2021c/731-ilverignsoncentratealesgreement20210923)
(https://gsilver.com/news/2021c/731-ilverignsoncentratealesgreement20210923)
Signs Concentrate Sales Agreement
(https://gsilver.com/news/2021c/731-ilverignsoncentratealesgreement20210923)
"). Similarly, approximately US$750,000 will be used to repay the first four
months' of interest and principal payments on Ocean Partners' US$5.0 million
facility drawn in August 2022 as noted above. In aggregate, after making
allowance for these repayments, the Company will have outstanding borrowings
of approximately US$9.0M to Ocean Partners. In conjunction with the New
Facility, the Company has agreed to consolidate and extend the sale of
concentrate derived from its Guanajuato mines into a single offtake agreement
with Ocean Partners for a term of 24 months ending December 31, 2024, subject
to a minimum delivery of 12,500 wet metric tonnes.

 

Shares for Debt

Guanajuato Silver also announces that it has completed its previously
announced shares-for-debt transaction totalling C$1,127,038 (see Guanajuato
Silver news release dated October 7, 2022 - "Guanajuato Silver Arranges Shares
for Debt
(https://gsilver.com/news/2022c/822-uanajuatoilverrrangesharesforebt20221007)
"). The Company has issued a total of 2,817,595 common shares at a deemed
price of C$0.40 per share in settlement of C$1,127,038 including 693,750
shares issued to non-arms-length parties to settle of indebtedness totalling
$277,500. The common shares are subject to a 4 month hold period expiring
April 8, 2023.

 

For further information regarding Guanajuato Silver Company Ltd., please
contact:

 

JJ Jennex, Gerente de Comunicaciones, T: 604 723 1433

E: jjj@GSilver.com

GSilver.com((1))

 

VSA Capital - AQSE Corporate Adviser

T: +44 (0) 20 3005 5000

Simon Barton - Corporate Finance

Andrew Monk - Corporate Broking

David Scriven - Corporate Broking

 

About Guanajuato Silver

Guanajuato Silver is a precious metals producer engaged in reactivating past
producing silver and gold mines near the city of Guanajuato, Mexico, which has
an established 480-year mining history. With five mines and three processing
facilities, the Company is one of the fastest growing silver producers in
Mexico.

 

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