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VANCOUVER, Dec. 19, 2019 /CNW/ - Tinka Resources
Limited ("Tinka" or the "Company") (TSXV &
BVL: TK) (OTCPK: TKRFF) is pleased to announce that it
has entered into an equity subscription agreement (the
"Agreement") with CompaƱia de Minas Buenaventura SAA
("Buenaventura"). Buenaventura is a precious and base
metals mining and exploration-development company with numerous
mining operations in Peru, listed
on the New York Stock Exchange and Lima Stock Exchange (NYSE:
BVN & BVL: BUENAV).
Under the terms of the Agreement, Buenaventura will subscribe
for 65,843,620 common shares (the "Common Shares") of Tinka
at a price of C$0.243 per Common
Share (the "Issue Price") for gross proceeds to Tinka of
C$16 million (the "Buenaventura
Subscription", and collectively with the pre-existing rights
subscriptions described below, the "Private Placement").
The Issue Price represents a premium of 83% to Tinka's
3-month VWAP and a premium of 45% to Tinka's 6-month VWAP, on
the TSX Venture Exchange. Upon closing of the Buenaventura
Subscription, Buenaventura will become a new insider of Tinka
holding approximately 19.9% of the outstanding common shares of the
Company on a non-diluted basis, subject to the exercise of
pre-existing pre-emptive rights. The long-term nature of this
strategic relationship is demonstrated by Buenaventura agreeing to
a 24-month equity lock-up on the Common Shares, as well as to
certain customary standstill provisions. Subject to receipt
of TSX Venture Exchange (the "Exchange") acceptance, the
Private Placement is expected to close on or about January 7, 2020.
The net proceeds from the Private Placement will be used for
development of the Company's Ayawilca Project, further exploration,
and for working capital and general corporate purposes. No finder's
fees or commissions are payable on the Private Placement.
The President and CEO of Tinka, Dr. Graham Carman, stated: "We are thrilled to
welcome Buenaventura as a strategic investor in Tinka and to have
them join our share register, which includes long-term supportive
shareholders such as Sentient. The investment by
Buenaventura, which is at a significant premium to market price, is
a strong endorsement of the Ayawilca project and our management
team. Buenaventura is a large and well respected Peruvian mining
company that has extensive experience in developing, building, and
operating mining projects in Peru."
The CEO of Buenaventura, Mr. Victor
Gobitz, stated: "Buenaventura is very pleased to make
this strategic investment in Tinka. We believe that the
Ayawilca project is an attractive development project that may
benefit from synergies with some of our existing operations in
Peru, such as Uchucchacua, El
Brocal and Yumpag, as well as offering potential for additional
mineral resource growth and new discoveries."
Upon closing of the Buenaventura Subscription, for so long as
Buenaventura owns 5% or more of the outstanding shares of Tinka, on
a partially-diluted basis, Buenaventura will have the right to
nominate one individual to Tinka's board of directors. In the
event that Buenaventura owns 20% or more of the outstanding shares
of Tinka, on a partially-diluted basis, Buenaventura will have the
right to nominate two individuals to Tinka's board. It is expected
that the first Buenaventura director nominee will be appointed at
the next annual general meeting of shareholders of the
Company. In addition, Buenaventura has been granted a
pre-emptive right to maintain its percentage interest in the
outstanding shares of Tinka, in connection with any future
issuances of Tinka securities, subject to certain exclusions.
Sentient Global Resources Fund IV, LP ("Sentient IV"), an
Insider of the Company, has exercised its pre-existing
participation rights in respect of the Private Placement. As
a result, Sentient IV will subscribe for a minimum of 10,288,066
Common Shares in the Private Placement at the Issue Price (the
"Sentient Subscription") for additional gross proceeds to
Tinka of C$2.5 million. Upon closing
of the Private Placement and assuming no additional pre-emptive
rights are exercised, it is anticipated that Sentient IV will hold
an aggregate of 74,036,831 common shares of Tinka or approximately
21.7% of the Company's outstanding common shares, and approximately
22.5% on a partially-diluted basis assuming only Sentient IV
warrants are exercised. As a result of the exercise of
Sentient IV's pre-emptive right, and on the assumption no
additional rights are exercised, it is anticipated that
Buenaventura will hold 19.3% of of the outstanding common shares of
the Company on a non-diluted basis, upon closing of the Private
Placement.
It is not known at this time if additional pre-existing
pre-emptive rights will be exercised. In the event that
additional pre-emptive rights are exercised, Tinka may issue up to
an additional 12 million Common Shares in the Private Placement at
the Issue Price for additional gross proceeds to the Company of
approximately C$2.9 million.
Participation by Sentient IV in the Private Placement is
considered a "related party transaction" pursuant to Multilateral
Instrument 61-101 - Protection of Minority Security Holders in
Special Transactions ("MI 61-101"). The Company is
exempt from the requirements to obtain a formal valuation or
minority shareholder approval in connection with the Insider's
participation in the Private Placement in reliance of sections
5.5(b) and 5.7(a) of MI 61-101.
All securities issued in connection with the Private Placement
will be subject to a statutory four-month hold period. The Private
Placement is subject to certain conditions customary for
transactions of this nature, including, but not limited to, the
receipt of all necessary approvals, including the approval of the
TSX Venture Exchange.
The securities offered have not been, and will not be,
registered under the United States Securities Act of 1933, as
amended (the "U.S. Securities Act") or any U.S. state
securities laws, and may not be offered or sold in the United States or to, or for the account or
benefit of, U.S. persons absent registration or an applicable
exemption from the registration requirements of the U.S. Securities
Act and applicable U.S. state securities laws. This press release
does not constitute an offer to sell or the solicitation of an
offer to buy securities in the United
States, nor in any other jurisdiction.
About Tinka Resources
Limited
Tinka is
an exploration and development company with its flagship property
being the 100%-owned Ayawilca carbonate replacement deposit (CRD)
located in the zinc-lead-silver belt of central Peru, 200 kilometres northeast of Lima. The Ayawilca Zinc Zone contains 11.7 Mt
of Indicated Resources grading 6.9% zinc, 0.2% lead, 15 g/t silver
and 84 g/t indium and 45.0 Mt Inferred Resources grading 5.6% zinc,
0.2% lead, 17 g/t silver and 67 g/t indium. A Preliminary
Economic Assessment for the Ayawilca Zinc Zone was released on
July 2, 2019 (see
release). The Qualified Person, Dr. Graham Carman, Tinka's President and CEO, and a
Fellow of the Australasian Institute of Mining and Metallurgy, has
reviewed and verified the technical contents of this release.
About CompaƱia de Minas Buenaventura
SAA
Buenaventura is a Peruvian precious metals producer with
over 66 years of experience in exploration, development,
construction and mining operations. Currently the company
operates several mines, both underground and open pit, and has an
important participation in Minera Yanacocha SRL, a world-class gold
deposit in the Cajamarca region and Sociedad Minera Cerro
Verde S.A.A, a world-class copper mine in the Arequipa region of
Peru. Buenaventura is the
first Latin American mining company to list on the New York Stock
Exchange, starting in 1996, and currently trades on the NY and
Lima stock exchanges.
On behalf of the Board,
"Graham Carman"
Dr. Graham
Carman, President & CEO
Forward Looking Statements: Certain information in
this news release contains forward-looking statements and
forward-looking information within the meaning of applicable
securities laws (collectively "forward-looking
statements"). All statements, other than statements of
historical fact are forward-looking statements. Forward-looking
statements are based on the beliefs and expectations of Tinka as
well as assumptions made by and information currently available to
Tinka's management. Such statements reflect the current
risks, uncertainties and assumptions related to certain factors
including, without limitations, drilling results, the successful
completion of the Private Placement, the exercise of existing
pre-emptive rights and the final subscription amounts for the
holders of the pre-emptive rights in connection with the Private
Placement, the appointment of Buenaventura's nominee(s) to Tinka's
board of directors, the use of proceeds from the Private Placement,
the Company's expectations regarding the Ayawilca Project PEA,
changes in world metal markets, changes in equity markets,
uncertainties relating to the availability and costs of financing
needed in the future, equipment failure, unexpected geological
conditions, imprecision in resource estimates or metal recoveries,
success of future development initiatives, competition, operating
performance, environmental and safety risks, delays in obtaining or
failure to obtain necessary permits and approvals from local
authorities, community agreements and relations, and other
development and operating risks. Should any one or more of these
risks or uncertainties materialize, or should any underlying
assumptions prove incorrect, actual results may vary materially
from those described herein. Although Tinka believes that
assumptions inherent in the forward-looking statements are
reasonable, forward-looking statements are not guarantees of future
performance and accordingly undue reliance should not be put on
such statements due to the inherent uncertainty therein. Except as
may be required by applicable securities laws, Tinka disclaims any
intent or obligation to update any forward-looking statement.
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 news release.
SOURCE Tinka Resources Limited