Aftermath Executes Definitive Agreement for the Sale of the Cachinal Silver Project in Chile
FOR IMMEDIATE RELEASE February 15, 2023
(AAG2022 – NR #2)
Aftermath Executes Definitive Agreement for the Sale of the Cachinal Silver Project in Chile
Vancouver, British Columbia, (Newsfile Corp. – February 15, 202 3) Aftermath Silver Ltd . (the
“Company”) (TSXV: AAG) (OTCQX: AAGFF) is pleased to announce the signing of a definitive agreement
(on the amended terms previously announced by the Company in its news release dated January 11,
2023), in respect of the disposition by the Company of its interest in the Cachinal De La Sierra Silver-Gold
Project (the “Cachinal Project” or “Cachinal”) to Honey Badger Silver Inc. (“Honey Badger”).
Ralph Rushton, President of Aftermath said: "This transaction allows us to focus on our flagship Berenguila
Project in southern Peru and Challacollo in northern Chile while providing cash and a significant position
in Honey Badger. Aftermath also retains exposure to Cachinal through future production-based cash
payments and an NSR should the Project go into production"
Transaction Terms:
• Consideration: The consideration payable to Aftermath for the disposition of the Cachinal Project
(the “Transaction”) will be comprised of the following: (a) an aggregate of 3,508,771 common
shares of Honey Badger (“Honey Badger Shares”), at a deemed price per share of $0.285 (being
C$1,000,000 in share consideration); (b) C$652,000 in cash payable at closing; and (c) additional
cash payments as described below.
• Subsequent Payments: The addit ional cash payments will be made in three subsequent
payments, as follows:
o C$200,000 on or before by May 31st, 2023
o C$400,000 on or before March 31, 2024
o C$400,000 on or before September 30, 2024
The additional cash payments will be evidenced by a promissory note issued at closing (the “Promissory
Note”), and the obligations thereunder will be secured by a pledge over the shares of the Chilean entity
which holds the Cachinal Project. The Promissory Note will provide Honey Badger with the option, subject
to regulatory approval (including the approval of the TSX Venture Exchange (the “ TSXV”)), to satisfy
payments by issuing additional Honey Badger Shares at a deemed price per share equal to the greater of:
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(a) the 30 trading -day volume weighted average price of the Honey Badger Shares on the TSXV (the
“VWAP”); or (b) the maximum permitted discount permitted under the policies of the TSXV; provided that
the Company will not be able to issue Honey Badger Shares in satisfaction of amounts owing if its 30
trading-day VWAP is less than C$0.05).
• 1% NSR and Production Payments Royalty: In connection with the acquisition of the Cachinal
Project, Honey Badger has agreed to grant Aftermath with a 1% net smelter returns royalty (with
a complete buy-back option in favour of Honey Badger for C$8,500,000) as well as a production
payments royalty upon commencement of commercial production at Cachinal, (payable, in cash
or shares at Aftermath’s option (but subject to required regulatory approvals in respect of share
payments), of C$0.50 per payable silver ounce produced at the Cachinal Project, until an
aggregate of C$2,500,000 has been paid, at which point the production payments royalty will
terminate.
• Hold Period: In addition to any hold periods imposed by applicable securities laws, the Honey
Badger Shares to be issued to Aftermath (including any additional Honey Badger Shares issued in
satisfaction of amounts owing under the Promissory Note) will be subject to the following
restrictions on transfer, subject to custo mary exceptions (the “ Holding Period”): (i) 50% of the
shares issued will be subject to transfer restrictions expiring six months and one day from the date
of issuance, and (ii) the remaining 50% of the shares issued will be subject to transfer restrictions
expiring on the one-year anniversary of the date of issuance. The foregoing restrictions will be set
out in a lock-up agreement that the parties will enter into as part of closing, which will also include
customary covenants regarding voting support and standstill during the lock-up period as well as
limitations on dispositions following the expiry of the lock-up period.
Closing of the Transaction remains subject to customary closing conditions for transactions of this nature,
including approval by the TSXV.
About Aftermath Silver Ltd.
Aftermath Silver Ltd . is a leading Canadian junior exploration company focused on silver, and aims to
deliver shareholder value through the discovery, acquisition and development of quality silver projects in
stable jurisdictions. Aftermath has developed a pipeline of projects at various stages of advancement. The
Company's projects have been selected based on growth and development potential.
• Berenguela Silver-Copper project. The Company has an option to acquire a 100% interest through
a binding agreement with SSR Mining. The project is located in the Department of Puno, in southern
central Peru. A NI 43-101 Technical Report on the property was filed in February 2021 (available on
SEDAR and the Company’s web page). The Company is currently drilling at Berenguela and planning
to advance the project through a pre-feasibility study.
• Challacollo Silver-Gold project. The Company recently completed the acquisition of a 100% interest
in the Challacollo silver -gold project from Mandalay Resources; see Company news release dated
August 11, 2022. A NI 43 -101 mineral resource was released on December 15, 2020 (available on
SEDAR and the Company’s web page) . The Company is currently permitti ng road access in
anticipation of an upcoming drill program.
• Cachinal Silver-Gold project. The Company own s a 100% interest in the Cachinal Ag -Au project,
located 2.5 hours south of Antofagasta. On June 10, 2022, Aftermath announced it had reached an
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agreement to sell Cachinal to Honey Badger Silver Inc. On February 15, 2023 Aftermath announced
the signing of the Definitive Agreement with Honey Badger. On September 16, 2020, the Company
released a CIM-compliant mineral resource estimate and accompanying NI 43-101 Technical Report
(available on SEDAR and on the Company's web page).
ON BEHALF OF THE BOARD OF DIRECTORS
“Ralph Rushton”
Ralph Rushton
CEO and Director
604-484-7855
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.
Cautionary Note Regarding Forward-Looking Information
This release includes certain statements and information that may constitute forward-looking information
within the meaning of applicable Canadian securities laws. Forward -looking statements relate to future
events or future performance and reflect the expectations or beliefs of management of the Company
regarding future events. Generally, forward-looking statements and information can be identified by the
use of forward -looking terminology such as “intends” or “anticipates”, or variations of such words and
phrases or statements that certain actions, events or results “may”, “could”, “should”, “would” or “occur”.
This information and these statements, referred to herein as "forward‐looking statements", are not
historical facts, are made as of the date of this news release and include without limitation, statements
regarding discussions of future plans, estimates and forecasts and statements as to management's
expectations and intentions with respect to, among other things, the structure of the Transaction; the
terms and conditions on which the Transaction will be completed; the approval of the TSXV regarding the
Transaction;.
These forward‐looking statements involve numerous risks and uncertainties and actual results might differ
materially from results suggested in any forward -looking statements. These risks and uncertainties
include, among other things, market uncertainty and that the conditions to completing the Transaction
may not be met or waived.
In making the forward looking statements in this news release, the Company has applied several material
assumptions, including without limitation, that the conditions to completing the Transaction will be met
or waived.
Although management of the Company has attempted to identify important factors that could cause
actual results to differ materially from those contained in forward-looking statements or forward-looking
information, there may be other factors that cause results not to be as anticipated, estimated or intended.
There can be no assurance that such statements will prove to be accurate, as actual results and future
events could differ materially from those anticipated in such statements. Accordingly, readers should not
place undue reliance on forward -looking state ments and forward -looking information. Readers are
cautioned that reliance on such information may not be appropriate for other purposes. The Company
does not undertake to update any forward -looking statement, forward-looking information or financial
out-look that are incorporated by reference herein, except in accordance with applicable securities laws.
We seek safe harbor.