Montan Mining Announces Transformative Agreement to Acquire Producing Processing Plant IN Northern PERU
#1400 – 1111 West Georgia St. Vancouver, BC V6E 4M3
MONTAN MINING ANNOUNCES TRANSFORMATIVE AGREEMENT TO
ACQUIRE PRODUCING PROCESSING PLANT IN NORTHERN PERU
Montan Mining to acquire producing 125TPD capacity Mirador processing plant,
strategically located 450km north of Lima.
Mirador plant is fully operational and has a two (2) month backlog of flotation feed
material delivered and queued for processing.
Cost and efficiency focussed operational management team built Mirador for
US$2.3M and reached planned initial 125 TPD capacity in just 16 months.
Personnel from the Kairos’ operational team will guide start-up at Montan’s newly
acquired Cerro Dorado plant.
Purchase includes six (6) wholly owned mineral concessions including two (2)
concessions prospective for gold (Au) located 10 km from Montan’s Cerro Dorado
project.
Vancouver, BC, February 16th, 2017 – Montan Mining Corp. ( TSXv: MNY | FSE: S5GM |
SSE: MNYC) (“Montan” or the “Company”) is pleased to announce the signing of a Term Sheet
with Pacific Alliance Capital Group Ltd. (“Pacific Alliance”) for the purchase, by Montan, of the
Peruvian compan ies Kairos Capital Peru S.A.C (“Kairos”) and M&S Transportes y Servicios
Generales S.R.L (“Mirador”) from Pacific Alliance.
The key assets (“Pacific Alliance Assets ”) held by the companies under acquis ition include the
100% owned 125 TPD Mirador Processing Plant located in Chimbote, Peru and s ix (6 ) 100%
owned mineral concessions as well as options to buy three (3) additional mineral concessions.
Montan will be afforded the opportunity to review these options for acquisition during the due
diligence process. Two (2) of the Au concessions are located 10km from Montan’s Cerro Dorado
plant in Arequipa.
The Mirador plant is fully operational and currently has a two (2) months of material stockpiled
and quequed for processing through its flotation circuit . The Mirador plant is fully permitted to
125 TPD and currently operating at 100TPD through its 100TPD flotation circuit. The plant also
features a 25TPD carbon in pulp (“CIP”) gold circuit which is on standby . The Mirador plant is
strategically located 450 km north of Lima whereas the majority of the toll milling industry is
focused in the south of the country in the Chala and Nazca districts.
The operational team of Kairos consists of four (4) full time resident Korean engineers, one (1) of
whom will guide the start-up at Montan’s newly acquired Cerro Dorado plant.
“The acquisition of Kairos S.A.C and its Mirador plant is a transformative acquisition for Montan
Mining. Upon closing of the transaction , Montan will have secured a fully operating asset in the
strategic northern part of Peru where there is almost negligible competition and a readily available
supply of high grade mineralized material which is currently being trucked over 1,200km south for
processing in Chala or Nazca. With this acquisition, Montan will become the first Canadian public
company with two geographically strategic plant locations, and will also own one (1) fully
permitted mine at Rey Salomon and ten (10) highly prospective and strategically located mineral
claims. This integrated precious metals mining and processing model will allow Montan to ensure
a secure source of feed for its plants and to deliver cash flow from which to build out future
growth,” stated Luis F. Zapata, Executive Chairman of Montan Mining.
Acquisition Terms:
Montan will purchase 100% of Kairos and Mirador from Pacific Alliance in exchange for:
The payment of US D $ 3 Million in cash to Pacific Al liance, in compensation for US$3.4
Million in debt currently held by the parent company of Pacific Alliance; and
The issuance of US D $3 Million in MNY shares at the next major MNY private placement
issue price.
Upon the acquisition of Kairos by Montan, Pacific Alliance and Mirador would also transfer the
full value of the tax creditable capital allowances of the full US$3.4 Million expended to Montan.
Upon closing of the transaction Montan will allow for Kairos to nominate one (1) director to the
Board of the Company.
Pursuant to the Term Sheet, Pacific Alliance grants Montan the exclusive right to close a
transaction to acquire Kairos and Mirador on terms reflective of the transaction contemplated in
the Term Sheet until June 30th, 2017 (the “Exclusivity Period”); this Exclusivity Period provides
Montan with ample time to secure funds to cover the costs of the acquisition of Kairos and
Mirador, the expansion capital and operating expenses of its Cerro Dorado acquisition, and to
complete all due diligence related to the acquisition.
Pacific Alliance has agreed that during the Exclusivity Period neither it, nor any of its subsidiaries
will, solicit, discuss, negotiate, facilitate, or accept any offers for a Transaction with or from any
other third party.
Closing of the transaction is conditional upon TSX Venture Exchange approval.
The technical information in this news release has been prepared in accordance with the Canadian
regulatory requirements set out in National Instrument 43 -101 and the scientific and technical
information in this news release has been reviewed on behalf of the company by Ms. Jenna Hardy,
M.Sc., P.Geo., of Nimbus Management Ltd., a Qualified Person.
On behalf of the Board of Montan.
Ian Graham
CEO and Director
Tel: +1.604.671.1353
Email: [email protected]
About Montan Mining Corp.
Montan Mining Corp. is an emerging gold producer focusing on monetizing mining assets in Peru.
The company is backed by an experienced management team with diverse technical, market, and
finance expertise and is supported by committed and sophisticated inv estors focused on building
long term value for shareholders.
For more information, please visit the corporate website at http://www.montanmining.ca or
contact:
Investor Contact:
Luis F. Zapata
Executive Chairman
Email: [email protected]
Tel: +1-604-358-1382
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 F OR THE ADEQUACY OR ACCURACY OF
THIS NEWS RELEASE.
Forward-Looking Statements: Certain statements in this press release are forward -looking statements within the
meaning of applicable securities laws. Forward-looking statements in this press release include that we will purchase
Peruvian company Kairos Capital Peru S.A.C (“Kairos”) and M&S Transportes y Servicios Generales S.R.L
(“Mirador”) from Pacific Alliance, that we may exercise our option to buy three additional mineral concessions
following a review of these options for potential acquisition during the due diligence process, or that the two mineral
concessions belonging to Kairos may help procure provide mineral feed for our Cerro Dorado plant, and that one of
the Kairos engineers will guide start-up Montan’s newly acquired Cerro Dorado plant. Other forward looking
statements include that Montan may become the first Canadian public company with two geographically diversified
strategic plants locations, and have ten (10) prospective and well l ocated mineral claims, and that its integrated
precious metals mining and processing model will allow Montan to ensure a secure source of feed for its plants; that
it will purchase 100% of Kairos and Mirador from Pacific Alliance in exchange for USD $3 Million cash the issuance
of USD $3 Million in MNY shares at the next major MNY private placement price, and that Pacific Alliance will
transfer the tax creditable capital allowances of USD $3.4 Million to Montan, and that the exclusivity period provides
Montan with ample the time to secure funds to cover the costs of the acquisition of Kairos and for the expansion future
capital and operating expenses of its Cerro Dorado acquisition, or that the company is assured of TSX Venture
Exchange approval fo r its acqu isition; and that we can secure the long ter m growth of the Company . Such
forward-looking statements and information are subject to risks, uncertainties and other factors which may cause our
actual results, performance or achievements, or industry results, to be materially different from any future results,
performance or achievements expressed or implied by such forward-looking statement. Specific risks included that we
may not be able to secure sufficient mineral feed stock of appropriate grades, we may not be able to attract or retain
key employees necessary for our operations, we may not be able to finance operations, we may not be able to sustain
recoveries that ensure profitabiulity, and we may not be able to locate or negotiate transactions which result in
growth of our business . We may not be able to become profitable even if we are producing and milling to capacity,
profitability depends on revenues and expenses which are not completely controllable; we may not be able to secure
mineral feed from other miners; and we may not be able to restart production because of technical or expense issues.
Readers are cautioned to review the risk factors of junior mining companies which apply equally to our company, and
to our management discussion and a nalysis as filed on SEDAR. Other than as required by law, we assume no
obligation to update these forward looking statements.