TSX.V: SCZ
FSE: 1SZ
VANCOUVER, Dec. 14, 2017 /CNW/ - Santacruz Silver Mining
Ltd. (TSX.V:SCZ) (the "Company" or "Santacruz") announces that
it has reached agreement with the Contracuña group of companies
("Contracuña") to amend the terms of the Option Agreement
(see press release dated June 21,
2017) to acquire 100% ownership of the Veta Grande Project,
including the Veta Grande mine and
milling facility as well as the Minillas property located in Zacatecas, Mexico.
Details of the payment schedule per the amended Option Agreement
are as follows:
1. US$500,000 paid on December 13, 2017;
2. US$500,000 on or before
December 13, 2018;
3. US$2,500,000 on or before
December 13, 2019;
4. US$2,500,000 on or before
December 13, 2020;
5. US$5,000,000 on or before
December 13, 2021; and
6. US$4,500,000 on or before
December 13, 2022;
In addition the Company has granted to Contracuña a 1% net
smelter royalty ("NSR") that commences December 14, 2022. The Company has the right to
acquire the NSR at any time by paying Contracuña US$1,500,000.
Zacatecas Mineral Assets Option Agreement
In addition, the Comp any advises that it has concurrently
entered into a binding letter of intent (the "LOI") with Carrizal
Mining, S.A. de C.V. ("Carrizal"), a private Mexican silver
producing Company, pursuant to which Carrizal will acquire a 20% working interest
in the Veta Grande Project, as well as the Zacatecas Properties
under option by Santacruz from Golden Minerals Company (see press
release dated May 4, 2016)
(collectively the "Zacatecas Mineral Assets"). Carrizal may earn its 20% working interest by
funding 100% of the cost to increase the capacity of the
Veta Grande milling facility to
750 tpd (expected to be by the end of Q1 2018), as well as
providing a surface diamond drill rig and drilling materials to
conduct exploration drill campaigns at the Veta Grande mine, proximate to the Company's
current mining activities, and at the Navidad property and Panuco Deposit. In
addition Carrizal is providing a
short-term working capital advance of US$500,000. Following Carrizal completing the required earn-in
expenditures, a 20:80 joint venture between Carrizal (20%) and Santacruz (80%) will be
formed.
"The Zacatecas Mineral Assets represent one of the largest and
most historically important land packages within Mexico´s
Zacatecas silver belt and we are
very pleased to have reached this agreement with Contracuña which
provides us greater flexibility to consolidate our mineral
interests," stated Arturo Préstamo, President and CEO of
Santacruz. "In addition, our joint venture with Carrizal is an important milestone in our plan
to grow our Zacatecas operations
into a significant silver producer, and we look forward to its
continued development as part of Santacruz's transition into a
mid-tier Mexican silver producer."
Carlos Silva, CEO of Carrizal and COO of Santacruz, stated
"Carrizal is very pleased to be
partnering with Santacruz on this significant mineral portfolio in
Mexico," Mr. Silva continued "We
intend to grow this asset base by developing a methodical and
achievable mine plan and then executing it."
About Santacruz Silver Mining Ltd.
Santacruz is a Mexican focused silver company with two producing
silver projects (Rosario,
including the Cinco Estrellas property and Membrillo Prospect, and
the Veta Grande mine and milling
facility); and two exploration properties including the
Minillas property and Zacatecas properties. 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.
About Carrizal Mining, S.A. de C.V.
Carrizal is a Mexican privately
owned company which operates the Zimapan mine in Zimapan Hidalgo Mexico. The company runs a
3,200 tpd mill and produces approximately 5.5 million silver
equivalent ounces a year.
'signed'
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.
Rosario Project
The decisions to commence production at the Rosario Mine,
Cinco Estrellas Property and Membrillo Prospect were not based on a
feasibility study of mineral reserves demonstrating economic and
technical viability, but rather on a more preliminary estimate of
inferred mineral resources. Accordingly, there is increased
uncertainty and economic and technical risks of failure associated
with this production decision. Production and economic variables
may vary considerably, due to the absence of a complete and
detailed site analysis according to and in accordance with NI
43-101.
Veta Grande Project
The decision to commence production at Veta Grande Project
was not based on a feasibility study on mineral reserves
demonstrating economic and technical viability. Accordingly,
there is increased uncertainty and economic and technical risks of
failure associated with this production decision. Production
and economic variables may vary considerably due to the absence of
a complete and detailed site analysis according to and in
accordance with NI 43-101.
SOURCE SantaCruz Silver Mining Ltd.