GSilver closes $10,722,659.33 oversubscribed equity financing
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THIS PRESS RELEASE IS NOT FOR DISTRIBUTION TO US NEWS WIRE SERVICES OR FOR DISTRIBUTION IN THE UNITED STATES
VANCOUVER, BC / ACCESSWIRE / July 21, 2022 / Guanajuato Silver Company Ltd. (there “Company” Where “GSilver“) (TSXV:GSVR) is pleased to announce the closing of its subscription receipt equity financing (“Subscription receipts“) at a price of C$0.33 (equivalent to approximately US$0.256) per Subscription Receipt (the “Equity financing“) announced June 29, 2022 – “GSilver to acquire 100% of Great Panther’s Mexican mining assets“; and July 7, 2022 – “GSilver Raises Debt and Equity Financing to US$15.3M. “Subscriptions totaling US$10,722,659.33 (C$13,822,178.04) were received with funds (less 50% cash commission and agent’s advisory fees) held in escrow by the Company’s escrow agent, Odyssey Trust Company Escrowed funds will be released from escrow upon satisfaction of certain release conditions, including completion of the Company’s purchase of Great Panther’s Mexican subsidiary Mining (TSX:GPR), Minera Mexicana Rosario SA de CV (“MMR“), which owns the Topia mine and production facility, the San Ignacio mine, the Valenciana mining complex and the Cata processing plant in Mexico (the “MMR acquisition“).
Upon closing of the MMR Acquisition, each subscription receipt will be automatically converted into one unit of GSilver consisting of one common share and one share purchase warrant and the Escrowed Funds and any interest thereon. (less the balance of the agent’s cash commission, advisory fees and expenses) will be remitted to the Company. Each GSilver warrant will be exercisable for one GSilver share at a price of C$0.50 for a period of 36 months following the closing of the MMR acquisition. If the conditions of escrow are not satisfied within 90 days, the Escrowed Funds and any interest thereon will be returned to purchasers of Subscription Receipts and such Subscription Receipts will be cancelled. The Company expects to complete the acquisition of MMR within the next two weeks.
Research Capital Corporation and Canaccord Genuity Corp. acted as joint lead arrangers and joint bookrunners for the equity financing, along with Echelon Wealth Partners Inc. and Roth Canada Inc. (collectively the “Officers“). The Company paid the Agents a cash commission (the “Agency costs“) equal to 6% (2% for arm’s length purchasers and 0% for non-arm’s length purchasers listed by the President of the Company (the “President’s list“)) from the gross proceeds of equity financing and issued agent warrants (“Mandates of agents“) equal to 6% (2% for arm’s length purchasers and 0% for non-arm’s length purchasers on the President’s list) of the total number of subscription receipts sold. Agents will also receive an advisory fee equivalent to $298,000 and $905,695 Agent Warrants Each Agent Warrant entitles its holder to purchase one common share of the Company at a price of $0.33 for a period of three years following the completion of the MMR acquisition Half of the agency fees have been placed in escrow with the subscription funds pending the closing of the MMR acquisition.
Certain directors and officers of GSilver also participated in the equity financing.
In conjunction with the equity financing, GSilver has also signed a Concentrated 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 for the purchase price of MMR and general corporate purposes and working capital.The OP Facility will be for a 24 month term, secured by a pledge of MMR shares and repayable over a 21 month period after a three month grace period. will be calculated at 12-month LIBOR + 7.5% Closing of the OP facility will occur concurrently with the acquisition of MMR.
All securities issued under the equity financing are subject to a four-month hold period expiring on November 22, 2022. The acquisition of MMR remains subject to TSXV approval and there can be no assurance that the Company will complete with successful completion of this acquisition on the terms currently contemplated or at all.
Gregory T. Chu, A Law Corporation acted as counsel to GSilver and McCarthy Ttrault LLP acted as counsel to the agents.
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.
ON BEHALF OF THE BOARD OF DIRECTORS
President and CEO
For more information about Guanajuato Silver Company Ltd., please contact:
JJ Jennex, Communications Manager, +1 (604) 723-1433
E-mail: [email protected]
Keep following our progress at: www.GSilver.com
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 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 relating to future events or future performance, including, but not limited to, the acquisition of MMR on the proposed terms and conditions and the estimated time for its closing, GSilver’s ability to raise the balance of the financing necessary to complete the acquisition of MMR, including the OP Facility, on the terms and conditions, in the amounts and on the schedule currently contemplated. These forward-looking statements and information reflect the management‘s current beliefs and are based on assumptions made by and information currently available to the Company. Readers are cautioned that these forward-looking statements and information 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 limit, market conditions, availability of financing, metal prices, 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 government or regulatory approvals and permits, and other risks in the mining industry . There can be no assurance that GSilver will successfully finance and complete the acquisition of MMR on the contemplated terms or at all. In addition, there is continued uncertainty surrounding the spread and severity 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, the ability to access MMR, El Cubo and/or El Pinguico properties or acquire equipment, contractors and other personnel or raising 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 www.sedar.com and readers should not place undue reliance on it. 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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