Defiance Silver Exercises Option for 100% Ownership of Lucita Licenses and Provides Update on San Acacio Agreement
Defiance Silver Exercises Option for 100%
Ownership of Lucita Licenses and Provides
Update on San Acacio Agreement
Vancouver, British Columbia--(Newsfile Corp. - January 11, 2024) -
Defiance Silver Corp. (TSXV:
DEF) (FSE: D4E) (WKN: A1JQW5) ("Defiance" or "The Company") is pleased to announce that
that the Company has completed all purchase payments to acquire a 100% interest in Pan
American Silver Corp.'s ("Pan American") Lucita property in Zacatecas, Mexico. Pan American
Silver retains a 2.0% Net Smelter Royalty (NSR) on the Lucita property.
Defiance also reports that the terms of the San Acacio property agreement were successfully
renegotiated with the vendor.
TERMS OF LUCITA PROPERTY AGREEMENT
On December 2nd, 2020, Defiance entered into a definitive option agreement with Pan American to
acquire a 100% interest in Pan American's Lucita property, located adjacent to Defiance's San Acacio
property in Mexico's prolific Zacatecas silver district (Figure 1,
See News Release dated December 2,
2020
).
Defiance acquired 100% ownership of the Lucita Property, while Pan American retains a 2% NSR. The
option terms included an initial payment of US$100,000 upon signing; US$100,000 on or before the
first-year anniversary; US$500,000 on or before the second-year anniversary; and a final payment of
US$800,000 on or before the third-year anniversary. The terms were successfully completed as of
December 2023 with total payments of US$1,500,00 being made.
Figure 1:
Map of Zacatecas District showing Defiance's Lucita and San Acacio properties
To view an enhanced version of this graphic, please visit:
https://images.newsfilecorp.com/files/2950/193857_a2a4f7335432e8c5_001full.jpg
HIGHLIGHTS OF THE LUCITA ACQUISITION
Defiance Silver's 100%-owned Lucita land package includes both the Lucita Project and the Panuco
Project (see Figure 2).
Defiance's
Zacatecas District landholdings increased
from 1,600 Ha
to over 4,300 Ha
LUCITA PROJECT
- Successful 2021 maiden drill program on the Palenque vein system
including:
Discovery of a blind epithermal system
returning
multiple high-grade results
in hole
DDLU-22-10 (
See News Release dated August 9, 2022
).
Fresnillo-style
high-grade silver mineralization
encountered over intercepts
greater than
3 meters
, including results
up to
3,260 g/t Ag
(DDLU-21-05, from 154.10m -
See News
Release dated April 13, 2022
)
Wide widths
of moderate-grade silver hosted in sediments, including an interval of
49.87m
with a weighted average
of 58.79 g/t Ag
. (DDLU-22-13 -
See News Release dated April 13,
2022
)
PANUCO PROJECT
: Ongoing exploration indicates the
presence of silver-rich polymetallic
systems with large footprints.
Historic drilling by Pan American intercepted multiple
high-grade silver results from
different veins
, including 1.25m of 779g/t Ag (LU-11-09 from 180.10m) and 3.35m of 325
g/t Ag (LU-11-16 from 125.20m) (
See News Release dated December 2, 2020
)
Surface mapping and sampling
within Defiance's Panuco Project demonstrates the
presence of the mineralised on-strike extension
of the vein structure which hosts
Zacatecas Silver Corporation's 16.4-million-ounce silver-equivalent Panuco Deposit. ** (
See
Zacatecas Silver's NI 43-101 technical report dated January 28, 2022
)
Initial exploration results suggest that Defiance's Panuco project is
one of the top
polymetallic targets in the district
. Defiance will provide an update once the full analytical
results have been received by the company.
**Defiance Silver's qualified person and technical team have not independently verified this information,
and the information is not necessarily indicative of the mineralization on the Company's Panuco project
.
FURTHER WORK
: More than
10 key target areas exist on Defiance's Lucita acquisition.
Systematic ranking
of the target areas will continue as the company receives results from
the
ongoing property-wide mapping, sampling, and re-logging program
.
To facilitate an extensive drill campaign over the Lucita property, the company has
completed the necessary work to submit a new permit
. Drill permissions are in place for a
preliminary drill program
whilst the company awaits the grant of the new permit.
Follow-up drilling is planned
for the most prospective targets.
MANAGEMENT COMMENTARY
Chris Wright, Chairman & CEO, commented: "This acquisition nearly tripled Defiance's Zacatecas
District land position to over 4,300 Ha. The Lucita land package contains some of the most prospective
targets in the historically underexplored Zacatecas silver district. Exercising the Lucita option represents
a key milestone for Defiance Silver in establishing a district-scale land package in one of the most
prolific historic silver districts in the world.
"Work to date on the Lucita land package continues to confirm our exploration thesis and strategy in the
district. Both the historical high-grade drill results in the Panuco project area and Defiance's drill
discoveries on the Palenque structure demonstrate the district-scale discovery potential of the Lucita
property."
Figure 2:
Map of Zacatecas District showing Defiance's project areas
To view an enhanced version of this graphic, please visit:
https://images.newsfilecorp.com/files/2950/193857_a2a4f7335432e8c5_002full.jpg
UPDATE ON SAN ACACIO OPTION AGREEMENT
Defiance is also pleased to announce that the Company has successfully restructured the option to
acquire 100% of the San Acacio property in the the Zacatecas district.
The project vendor has agreed to extend the option agreement terms by one year from September 27,
2023 to September, 27, 2024. Defiance will now be making quarterly payments, over the year, to the
property vendor totaling US$539,721.51, with the final option payment of US$2,300,000 due September
27, 2024. In accordance with the original agreement, the vendor retains a 2.5% NSR which may be
purchased for US$2,500,000.
SHARES FOR DEBT/ SHARES FOR SERVICES
The Company also announces that it has settled and extinguished $36,000 of outstanding debt (the
"
Debt
") through the issuance of common shares of the Company (the "
Shares
"). In accordance with the
settlement of debt (the "
Debt Settlement
"), the Company issued 257,143 Shares at a deemed price of
$0.14 per Share to one (1) non-arm's length creditor of the Company. The Company chose to settle and
extinguish the Debt through the issuance of Shares to preserve cash and improve the Company's
balance sheet. The Debt Settlement is subject to approval by the TSX Venture Exchange (the "
TSXV
").
The Company previously entered into a non-arm's length administrative services agreement dated May
1, 2023 (the "
Agreement
"), for services provided by an officer of the Company. As part of the
consideration payable by the Company under the Agreement, the Company has agreed to issue that
number of Common Shares equal to $1,330 per month (the "
Service Shares
"), to be issued on a semi-
annual basis and pursuant to the policies of the TSXV. The Agreement was for a term of three months
and has automatically renewed in accordance with its terms, terminable by either party providing 30
days' notice of such termination.
The deemed value of the Service Shares to be issued for a particular month, is to be the closing price of
the Company's shares on the last trading day of the month.
For services rendered under the Agreement between the period of May 1, 2023 and December 31,
2023, the Company intends to issue 80,406 Shares at a weighted average price of $0.136 per Share,
subject to the approval of the TSXV.
The Service Shares issued are subject to a four month hold period, which will expire on a date that is
four months and one day from the date of issuance.
The Issuance of the Shares pursuant to the Debt and the issuance of the Service Shares remains subject
to the approval of the TSXV. No new insiders will be created, nor will any change of control occur, as a
result of the issuance of the Debt Shares and Service Shares.
As certain insiders are party to the Agreement, it may be considered a "related party transaction" under
Multilateral Instrument 61-101 Protection of Minority Security Holders In Special Transactions ("MI 61-
101") and the TSXV. The Company is relying on the exemptions from the formal valuation and the
minority shareholder approval requirements of MI-61-101 contained in section 5.5 (a) and Section 5.7
(1)(a) as the fair market value of the common shares being issued to insiders in connection with the
Service Shares does not exceed 25% of the market capitalization of the Company, as determined in
accordance with MI 61-101.
ABOUT DEFIANCE SILVER CORP.
Defiance Silver Corp. (TSXV: DEF) (OTCQX: DNCVF) (FSE: D4E) is an exploration company
advancing the district-scale Zacatecas project, located in the historic Zacatecas Silver District and the
Tepal Gold/Copper Project in Michoacán state, Mexico. Defiance is managed by a team of proven mine
developers with a track record of exploring, advancing, and developing several operating mines and
advanced resource projects. Defiance's corporate mandate is to expand the San Acacio and Tepal
projects to become premier Mexican silver and gold deposits.
Mr. George Cavey, P. Geo, is a Qualified Person within the meaning of National Instrument 43-101 and
has approved the technical information concerning the Company's material mineral properties contained
in this press release.
On behalf of Defiance Silver Corp.
"Chris Wright"
Chairman of the Board
For more information, please contact: Investor Relations at +1 (604) 343-4677 or via email at
.
www.defiancesilver.com
Suite 2900-550 Burrard Street
Vancouver, BC V6C 0A3
Canada
Tel: +1 (604) 343-4677
Email:
Disclaimer
Neither 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.
Caution Regarding Forward-Looking Information
Information contained in this news release which are not statements of historical facts may be
"forward-looking information" for the purposes of Canadian securities laws.
Such forward-looking
information involves risks, uncertainties and other factors that could cause actual results,
performance, prospects and opportunities to differ materially from those expressed or implied by such
forward looking information.
The words "believe", "expect", "anticipate", "contemplate", "plan",
"intends", "continue", "budget", "estimate", "may", "will", "schedule", "understand" and similar
expressions identify forward-looking information.
These forward-looking statements relate to, among
other things: the Company's expectations regarding the ability of the Mining Bureau of Mexico City to
reinstate ownership of the concessions to the Company, cooperation with the Mining Bureau relating
to such reinstatement and the potential for any successful solution resulting therefrom.
Forward-looking information is necessarily based upon a number of estimates and assumptions that,
while considered reasonable by Defiance, are inherently subject to significant technical, political,
business, economic and competitive uncertainties and contingencies. Known and unknown factors
could cause actual results to differ materially from those projected in the forward-looking information.
Factors and assumptions that could cause actual results or events to differ materially from current
expectations include, among other things: the inability of the Company to regain possession of its
concessions; political risks associated with the Company's operations in Mexico; the failure of the
Mining Bureau in Mexico City to take any coercive action to reinstate ownership of the concessions to
the Company; and the inability of the Company and its subsidiaries to enforce their legal rights in
certain circumstances. For additional risk factors, please see the Company's most recently filed
Management Discussions & Analysis for its quarter ended March 31, 2021, available on SEDAR at
www.sedar.com
.
There can be no assurances that forward-looking information and statements will prove to be accurate,
as many factors and future events, both known, and unknown could cause actual results, performance,
or achievements to vary or differ materially from the results, performance or achievements that are or
may be expressed or implied by such forward-looking statements contained herein or incorporated by
reference. Accordingly, all such factors should be considered carefully when making decisions with
respect to Defiance, and prospective investors should not place undue reliance on forward looking
information. Forward-looking information in this news release is made as at the date hereof. The
Company assumes no obligation to update or revise forward-looking information to reflect changes in
assumptions, changes in circumstances or any other events affecting such forward-looking
information, except as required by applicable law.
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