Yuntone Capital Corp. Completes Qualifying Transaction, Consolidation and Name Change to Mantaro Silver Corp. Private Placement Financing of $8.625 million
Yuntone Capital Corp. Completes Qualifying Transaction, Consolidation and Name
Change to Mantaro Silver Corp.
Private Placement Financing of $8.625 million
Vancouver, British Columbia, May 28, 202 1 – MANTARO SILVER CORP . (formerly Yuntone
Capital Corp.) (TSXV: MSLV) (the “Company”) is pleased to announce that it has completed its
previously announced "Qualifying Transaction" (the " Transaction"), with the result that the
Company is now a Tier 2 Mining issuer under the policies of the TSX Ven ture Exchange (the
"Exchange"). Mantaro owns five silver -focused Peruvian mineral properties, consisting of its
flagship Santas Gloria Silver Property and the San Jose, La Purisima, Cerro Luque and Huaranay
Properties (the “Silver Properties”).
Trading in the common shares of the Company under the new stock symbol "MSLV" is expected
to commence on June 1, 2021.
Chris Wilson , CEO of the Company commente d: " Over the last twelve months, we have
established a strong portfolio of silver-focused assets led by our flagship high-grade silver Santas
Gloria Property. With over $8 million cash on hand, we plan to carry out a robust exploration and
drill program on the numerous high -grade silver veins located throughout the Santas Gloria
Property."
The Silver Properties
Santas Gloria Silver Property
The Santas Gloria Silver Property is 100% owned by the Company. It comprises of three mineral
concessions totaling 1,100 hectares and is located 55 kilometers directly east of Lima.
Silver is the main target commo dity at Santas Gloria. Historic surface sampling reported grades
of over 400 oz/t Ag from bonanza shoots. Combined lead and zinc values range from 2% to 20%
in the high-grade silver zones. Information derived from report on Santas Gloria Mining Project
by Dr. Alberto Rios Carranza (2020).
There are over 10 kilometers of intermediate sulphidation veins arranged into three key target
zones: Tembladera, Elaine and Santa Cruz. The system has never been drilled tested and
exploitation of silver was limited to two areas of the San Jorge and Tembladera veins.
Historical production of silver has been carried out on Santas Gloria since colonial times. To date,
an estimated 4 kilometers of underground workings have exploited 2 of the 22 veins at Santas
Gloria. In 2005 and 2006, the San Jorge and Tembladera veins were worked on six levels. Santas
Gloria is permitted for 30 tonne per day extraction. A small processing plant at site produced silver
concentrates with reported silver recoveries of 85% -90%. Information der ived from report on
Santas Gloria Mining Project by Dr. Alberto Rios Carranza (2020).
Santas Gloria is a silver-base metal vein system otherwise known as Cordilleran silver-base metal
type. These deposits have many similarities to intermediate sulphidatio n vein systems. Such
deposits are attractive exploration targets due to their often high -grade nature and the large
vertical extent of precious and base metal endowment.
The Company intends to carry out an initial 7,500 meters of diamond drilling, from underground
and surface locations. Some remediation of historic underground workings will be required,
primarily replacement of timbers that have rotted. Drifting on the vein and drilling from new
crosscuts, should provide the most accurate targeting of high-grade silver mineralization, on the
San Jorge and Tembladera Veins. Other veins will be drilled from surface with a focus on the
more gold-rich silver-base metals veins in the north of the concession.
San Jose Silver, La Purisima, Cerro Luque and Huaranay Properties
The San Jose Silver Property is 100% owned by the Company, comprised of five concessions
totaling 3,300 hectares and located 180 kilometers directly north of Lima.
The La Purisima Property covers 1,075 hectares and reported historical assays of up to 8 ounces
per tonne Ag and 2.5 grams per tonne Au.
The Cerro Luque Property covers 1,650 hectares, contains multiple historic adits within its
alterations system and reported historic assays of 11 ounces per tonne Ag.
The Huaranay Property covers 2,000 hectares and includes two gold prospects (Corrales and
Chinchango). It also has a historic silver mine with reported grades of up to 37 ounces per tonne
Ag.
Qualifying Transaction
Pursuant to the terms of an amalgamation agreement (the “Amalgamation Agreement”) among
the Company, Mantaro Silver Corp. (“Mantaro”) and a subsidiary of the Company, the Company
acquired all of the issued and outstanding securities of Mantaro from Mantaro's securityholders.
Each holder of a Mantaro common share received one (1) post-Consolidation common share of
the Company (a “Resulting Issuer Share”) for each Mantaro common share held. All currently
outstanding convertible securities of Mantaro, specifically Mantaro warrants were exchanged or
replaced with Resulting Issuer warrants based on a 1:1 ratio and on the same economic terms
and conditions as previously issued.
A total of 26,311,145 Resulting Issuer Shares were issued to the Mantaro Shareholders. After
completion of the Transaction, the Mantaro securityholders became securityholders of the
Company.
In conjunction with closing of the Transaction, the Company completed a consolidation on the
basis of two pre -consolidation common shares o f the Company were exchanged for one post -
consolidation common share of the Company (the “Consolidation”). The Company also changed
its name to Mantaro Silver Corp. on closing of the Transaction (the “Name Change”). As part of
the Consolidation and the N ame Change, the CUSIP for the Resulting Issuer Shares was
changed to 564501104.
Non-Brokered Private Placement
Mantaro previously completed a non-brokered private placement, of 23,576,652 subscription
receipts (each a “Subscription Receipt”) at a price of $0.35 per Subscription Receipt for gross
proceeds of $8,251,828.50 (the “Concurrent Private Placement”).
As a result of closing of the Transaction, each Subscription Receipt automatically converted into
one common share of Mantaro (an “Underlying Share”) and one -half of one share purchase
warrant of Mantaro (an “Underlying Warrant”). Pursuant to the Amalgamation Agreement, the
Underlying Shares and Underlying Warrants were exchanged into Resulting Issuer Shares and
common share purchase warrants of the Company (“ Resulting Issuer Warrants”). Each
Resulting Issuer Warrant is exercisable into a Resulting Issuer Share at an exercise price of $0.55
until May 21, 2022.
Under the Concurrent Private Placement, Mantaro paid a cash commission of $298,810 to eligible
finders and issued a total 943,407 non-transferable common share purchase warrants (each an
“Broker Warrant”). Each Broker Warrant will be exercisable into one Resulting Issuer Share at
a price of $0.55 for a period of one year from the date of issue.
Mantaro also completed a non-brokered private placement financing of 1,072,142 units (each a
“Unit”) at a price of $0.35 per Unit for total proceeds of $375,250.25 (the "Unit Financing"). Each
Unit consists of one common share of Mantaro and one-half of one share purchase warrant, with
each whole warrant entitling the holder to purchase a common share of Mantaro at a price of
$0.55 per share for a period of twelve months from the date of clo sing. As a result of closing of
the Amalgamation Agreement, shares and warrants issued under the Concurrent Financing and
the Unit Financing were exchanged for Resulting Issuer Shares and Resulting Issuer Warrants.
The proceeds of the Concurrent Private Placement and Unit Financing will be used for exploration
on the Company’s flagship Santas Gloria Silver Property and working capital over the next twelve
months.
Outstanding Share Capital and Escrow Requirements
As a result of the transaction, there are an aggregate of 58,441,332 Resulting Issuer Shares, of
which 6,333,572 Resulting Issuer Shares and 54,285 Resulting Issuer Warrants will be subject to
a Tier 2 value escrow agreement.
Further, a significant portion of the Resulting Issuer Shares issued to the former shareholders of
Mantaro are subject to the following restrictions on resale:
(a) 7,200,000 Resulting Issuer Share issued in exchange for Mantaro common shares
purchased at $0.05 will be subject to a hold period and will be released as follows: 20%
on May 21, 2021, an additional 20% August 21, 2021, an additional 20% November 21,
2021, an additional 20% on February 21, 2022 and a final 20% on May 21, 2022; and
(b) 11,734,000 Resulting Issuer Share issued in exchange for Mantaro common shares
purchased at $0.125 will be subject to a hold period and released as follows: 10% on May
21, 2021, an additional 30% on August 21, 2021, an additional 30% on November 21,
2021 and the remaining 30% on February 21, 2022.
Directors and Officers of the Company
Following the Transaction, the leadership team of the Company:
• Dr. Christopher Wilson - Chief Executive Officer, Chairman, Chief Geologist and
Director
• Kelvin Lee - Chief Financial Officer & Corporate Secretary
• Charles Hethey - Director
• Darren Hazelwood - Director
• Patrick Hickey - Director
• Focus Communications
(Leo Karabelas)
- Investor Relations
Stock Option Grants
The Company has granted a total of 5,440,000 stock options to its directors, officers, employees
and consultants. The stock options have a five-year term, are exercisable at $0.35 per share and
will vest immediately (except for options issued for investor relations activities).
Additional Information
Additional information about the Company and the Transaction is available on SEDAR
at www.sedar.com under the Company's profile. The summary of the Transaction set out above
is qualified in its entirety by reference to the description of the Transaction in the Company’s filing
statement posted on SEDAR.
Qualified Person
Dr. Christopher Wilson, Ph. D., FAusIMM (CP), FSEG, a Qualified Person under National
Instrument 43-101, has reviewed and approved the technical information contained in this news
release.
About Mantaro Silver Corp.
Mantaro Silver Corp. is a British Columbia company that holds a 100% interest in its flagship
Santas Gloria Silver Property as well as a 100% interest in the San Jose, La Purisima, Cerro
Luque and Huaranay Properties.
For more information please contact:
Leo Karabelas
Phone: (905) 305-0308
E-mail: [email protected]
Forward-Looking Statements
Information set forth in this news release contains forward-looking statements that are based on
assumptions as of the date of this news release. These statements reflect management’s current
estimates, beliefs, intentions and expectations. They are not guarantees of future performance.
The Company cautions that all forward looking statements are inherently uncertain and that actual
performance may be affected by a number of material factors, many of which are beyond the
Company’s control. Such factors include, among other things: risks and uncertainties relating to
Company’s limited operating history and the need to comply with environmental and
governmental regulations. Accordingly, actual and future events, conditions and results may differ
materially from the estimates, beliefs, intentions and expectation s expressed or implied in the
forward looking information. Except as required under applicable securities legislation, the
Resulting Issuer undertakes no obligation to publicly update or revise forward-looking information.
The forward-looking statements contained in this news release are made as of the date of this
news release. Except as required by law, the Company disclaims any intention and assumes no
obligation to update or revise any forward -looking statements, whether as a result of new
information, future events or otherwise.
Neither the TSX Venture Exchange nor its Regulation Service Provider (as that term is
defined in the policies of the TSX Venture Exchange) accepts responsibility for the
adequacy or accuracy of this release.