Montan Mining Signs Binding Term Sheet with Cartesian Royalty Holdings FOR Funding Package of up to USD $10 Million
#1400 – 1111 West Georgia St.
Vancouver, BC V6E 4M3
MONTAN MINING SIGNS BINDING TERM SHEET WITH CARTESIAN ROYALTY
HOLDINGS FOR FUNDING PACKAGE OF UP TO USD $10 MILLION
• TRANCHED INVESTMENT I NTENDED TO FUND MIRADOR PROJECT ACQUI SITION, CERRO
DORADO STARTUP AND CAPACITY INCREASE
• INVESTMENT UP TO USD $10 MILLION, STRUCTURED IN A 25% EQUITY AND 75%
STREAM SPLIT
Vancouver, BC, April 25 th, 2017 – Montan Mining Corp. (TSXv: MNY | FSE: S5GM | SSE:
MNYC) (“Montan” or the “ Company”) is pleased to announce that that it has entered into a
binding term sheet with Cartesian Royalty Holdings Pte. Ltd. (“CRH”) for a financing package of
up to USD $10 million to fund the acquisition of Kairos Capital Peru S.A.C. and M&S Transportes
y Servicios Generales S.R.L, including the Mirador processing plant (together, “ Mirador”), as
announced on February 16, 2017 ; and to bring Montan’s 100% -owned Cerro Dorado gold
processing plant into full commercial production and increase its capacity.
The Term Sheet provides that CRH will invest in three (3) tranches, each with a specified use of
proceeds, as well as additional tranches at the discretion of CRH. Each tranche will be structured
in a 25% equity / 75% stream ratio.
Streaming Investment Terms: For each USD $1.0 million in streaming investment, CRH is to
receive 2,500 ounces of gold or gold equivalent from Montan, payable over a maximum of 50
months from closing. Repayment of each streaming investment is to commence six (6) months
after drawdown over a repayment period of 42 -months, subject to two (2) months of optional
payment holidays whereby Montan can defer its monthly payment . Each exercised payment
holiday must be separated by at least 6 months.
Equity Investment Terms : The Montan units are priced at a 20% discount to the VWAP of
Montan common shares for the 30 -day calendar day period immediately preceding the Term
Sheet; each unit will consist of one common share and one common share warrant; the warrant will
have an exercise price of a 25% premium to the VWAP with a term of five (5) years subject to
TSX-V approval or other regulatory constraints.
The initial tranche (“Tranche 1”) investment of USD $3.0 million is intended for the acquisition
of Mirador (see Montan press release dated February 16, 2017) and will be comprised of USD
$2.25 million as a secured streaming investment in Montan and USD $0.75 million as an equity
investment in Montan. Conditions to closing Tranche 1 include:
• Satisfactory completion of due diligence by CRH on Montan, Mirador, Cerro Dorado, and the
Kairos and Cerro Dorado SAC holding companies;
• Montan’s raising at least US D $1.0 million for optimization CAPEX and working capital at
Mirador
• Development of an operating plan in consultation with CRH including all necessary permits to
execute the operating plan; and
• Long-term contracts at Mirador totaling no less than 70% of plant capacity.
Subsequent tranches are subject to satisfactory post -acquisition performance at Mirador, and are
expected to comprise two (2) tranches to bring the Cerro Dorado plant into commercial operation
and to increase its capacity to 125 tonnes per day.
Net smelter returns royalty (“NSR ”): Upon closing of Tranche 1, Montan will provide CRH
with a two percent (2.0%) NSR on the Mirador and Cerro Dorado plants and such other
concessions, JV properties and mines that accrue to Kairos SAC or Cerro Dorado SAC; and any
future assets acquired, in whole or in part, with CRH funds. 0.5% of the NSR can be purchased by
Montan at any time for USD $750,000. Montan would also have a right of first offer on any sale of
the NSR by CRH to a third party.
In addition CRH will have the right to appoint a non -executive director to Montan's Board of
Directors for as long as the streaming investment is outstanding or CRH owns more than 5% of
Montan.
“Cartesian’s tailored financing solution should allow Montan to complete the purchase of the
Mirador Plant and bring Cerro Dorado into commercial production shortly ther eafter. We are
excited at the prospect of having two assets in production before Q4 2017. We are grateful to
Cartesian for their approach and the flexibility shown on the basis of project specific needs and our
risk-balanced cash flow projections”, stated Luis Zapata, Executive Chairman of Montan.
Peter Yu, Director of CRH stated, " Montan is a unique diversified mineral processing project
with strategic locations throughout Peru and is permitted for production. We are confident the
Montan team will create substantial value for its stakeholders, as well as artisanal miners in
Peru through their efficient and transparent business model”.
The CRH financing is subject to the approval of the TSX Venture Exchange.
On behalf of the Board of Montan.
Ian Graham
CEO and Director
Tel: +1.604.671.1353
Email: [email protected]
ABOUT CRH
CRH offers innovative financing structures with the goal of creating long -term growth and value
in world-class gold p rojects around the globe. CRH is an affiliate of Cartesian Capital Group,
LLC, a global private equity firm with proven expertise in assisting closely -held companies
develop into global market leaders. Cartesian Capital Group manages more than US$2.4 billion in
capital and has offices in New York, Sao Paulo, Shanghai, Warsaw, and Bermuda.
For more information, please visit the website at http://www.cartesianroyalty.com
ABOUT MONTAN MINING
Montan Mining is an emerging precious metals producer focusing on monetizing mining assets in
Peru. The Company is is the 100% owner of the operation ready Cerro Dorado gold processing
plant permitted to 125 TPD and the adjoining Rey Salomon gold mine in the southern Peruvian
mining district of Areq uipa; and and is completing the acquisition of the Mirador plant near
Chimbote, dirstrict of Ancash. Montan Mining has an experienced management team with diverse
technical, market, and finance expertise and is supported by committed and sophisticated investors
focused on building value for the long term.
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 FOR 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 those concerning the
projected timing, approval and closing of the CRH finan cing, Montan’s belief that the proceeds will be sufficient to
fund its Mirador acquisition and bring the Cerro Dorado gold processing plant into full commercial production, and
increase its capacity to 125 tonnes per day . Such forward-looking statements an d 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 b y such
forward-looking statement. Specific risks included that we may not be able to secure mineral feed stock, we may not be
able to attract or retain key employees necessary for our operations, we may not be able to finance operations, 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 compan y, and to our management discussion and analysis as
filed on SEDAR. Other than as required by law, we assume no obligation to update these forward looking statements.