Luca Mining Corp. Announces an all-in $33M Financing Package
Luca Mining Corp.
1000 – 1111 Melville St.
Vancouver, BC, V6E 3V6
www.lucamining.com
Page 1
Luca Mining Corp. Announces an all-in $33M Financing Package
VANCOUVER, BRITISH COLUMBIA – MARCH 31, 2023
Luca Mining Corp. (the “ Company” or “ Luca”, formerly Altaley Mining Corporation) is pleased to
announce an overall financing package of up to CAD $33,200,000 (the “Financing Package”) in place of
the previously proposed rights offering (the “ Rights Offering”) (see the Company’s news release dated
December 6, 2022). The Financing Package is comprised of a private placement and two strategic debt
settlements, as described below.
Financing Highlights
Strengthening the Company’s balance sheet through a strategic debt conversion of
approximately CAD$8,000,000 with its offtake partner Trafigura, and CAD$4,900,000 with its
lead investor Calu Opportunity Fund, LP.
Private placement, to raise gross proceeds of up to approximately CAD $20.3 million
Net proceeds will allow the Company to complete construction of its Tahuehueto phase 1 goal
of 500 tonnes per day by Q2 2023 and anticipates construction of the 1,000 tpd project before
the end of 2023.
Financing Package
The Company will not be proceeding with its previously announced Rights Offering due to significant
interest in an equity raise by way of private placement at a higher price than it would have been able
to conduct the Rights Offering. Accordingly, the Company has arranged a strategic debt conversion
with its offtake partner Trafigura De Mexico, S.A. de C.V. (“ Trafigura”)in the amount of US$5,800,000
(approximately CAD $8,000,000) and concurrently has arranged an additional financing (the
“Financing”), comprised of a private placement and debt settlement, to raise gross proceeds of up to
approximately CAD $25.2 million (of which $4.9M (the “ Initial Advance”) has been advanced and
deployed by the Company), for its 100% owned Tahuehueto Gold project and for working capital
purposes. Net proceeds will allow the Company to complete construction of its Tahuehueto phase 1
goal of 500 tonnes per day (“tpd”) and make substantial progress on construction towards completion
of phase 2, at 1000 tpd. The Company anticipates that the additional capital achieved from Tahuehueto
preproduction revenues will allow the Company to complete construction of the 1,000 tpd project
before the end of 2023.
The Company has received significant support in the Financing from Calu Opportunity Fund, LP
(“Calu”), which is a lender to the Company and was the proposed stand-by guarantor under the
planned Rights Offering (discussed above). Calu advanced CAD $9,180,000 (the “Total Advance”) to the
Company under the Rights Offering guarantee, of which the Company has spent the Initial Advance of
CAD $4,900,000 over recent months to continue the construction of the Tahuehueto Mine.
Accordingly, Calu has graciously agreed to convert the Initial Advance plus invest an additional
estimated amount of CAD $5,250,000 and become the lead investor in the Financing. In accordance
with the policies of the TSXV as the Initial Advance has already been spent on operations by the
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Company, that amount of the Financing must be processed as a debt settlement (the “ Debt
Settlement”) which will be completed on the same terms as the Private Placement described below,
and together with the Private Placement comprises the Financing.
Pursuant to the Private Placement, the Company intends to sell up to 58,000,000 units from treasury
(the “Units”) at a price of CAD $0.35 per Unit for aggregate gross proceeds of up to CAD $20,300,000.
The Company reserves the right to oversubscribe the Private Placement by 20%, pursuant to which the
Company may sell an additional 11,600,000 Units for gross proceeds of up to CAD $4,060,000 should
there be significant additional demand.
Each Unit shall consist of one common share of the Company (a “ Unit Share ”) and one-half of one
transferable share purchase warrant (each whole warrant, a “ Warrant”). Each Warrant shall entitle the
holder thereof to acquire one additional common share (a “Warrant Share”) at a price of CAD $0.50 per
Warrant Share for a period ending two (2) years (the “ Expiry Date”) following the closing of the Private
Placement (the “Closing Date”), subject to an acceleration clause.
If, at any time between the Closing Date and the Expiry Date, the closing price of the Company’s
common shares (“ Shares”) on the TSXV exceeds $0.90 for 15 consecutive trading days, then the
Company will earn the right, by providing notice (the “Acceleration Notice”) to the Warrant holder via a
news release, to accelerate the Expiry Date of the Warrants to that date which is 30 days from the date
of the Acceleration Notice (the “ Accelerated Expiry Date ”). In such instance, all Warrants that are not
exercised prior to the Accelerated Expiry Date will expire on the Accelerated Expiry Date.
The Company expects Calu to subscribe for an estimated amount of CAD $5,250,000 (15,000,000 Units,
the “Calu PP Investment ”) which together with the Debt Settlement of 14,000,000 Debt Settlement
units (the “ DS Units ”) having the same terms as the above Private Placement Units, represents an
overall $10,150,000 investment in the Company by Calu.
The completion of the Calu PP Investment and Debt Settlement, together with the previously
announced debt settlement between the Company and Calu, would result in Calu becoming the
Company’s Control Person, holding approximately 33% of the Company’s then outstanding Shares, on
an undiluted basis.
Trafigura Debt Conversion & Loan Waivers
Concurrently with the Financing the Company has agreed with Trafigura to waivers on loans existing
under three loan agreements in place for both the Campo Morado and Tahuehueto subsidiaries. The
remaining balances for the loans (prior to the above debt conversion) to Campo Morado are CAD $6.7
million, and that for Tahuehueto is CAD $17.2m. The agreed terms for the waivers are as follows:
A waiver of 12 months (commencing November 30 th, 2022) for the Tahuehueto loan
A waiver of 6 months (commencing November 30 th, 2022) for the Campo Morado loans
Trafigura has also agreed to convert US $5.8 million of the outstanding loans (approximately CAD $8
million) into common shares at CAD $0.35 per share plus 6,750,000 non-transferable share purchase
warrants (the “ Trafigura Warrants ”) and entered into amending agreements in respect of its
outstanding loans. Each Trafigura Warrant will be exercisable into one common share of the Company
at a price of CAD $0.43 per share for a period ending three (3) years from their date of issue. Pursuant
to the amending agreements, the overall loan amount outstanding will decrease from approximately
US $17 million to approximately US $11 million. As per the above, Trafigura has agreed to waive principal
payments for the Real de la Bufa (Tahuehueto) loan to November 2023, and the Campo Morado loans
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to May 2023. The Company expects to finalize documentation with Trafigura upon closing of the Private
Placement.
Messages from CEO
Mike Struthers, CEO of Luca Mining, stated: “ This is a transformational period for the Company. The
Financing Package is a major step in the Company’s restructuring, combining the conversion of
significant debt and infusion of substantial new capital, which on closing will result in a major
improvement to the Company’s balance sheet. Strong financial backing, taking further steps to
restructure the balance sheet, the name change, and adding additional strength to the board over
the coming months, are all important elements towards making 2023 a very successful year for Luca
Mining.
We are particularly grateful to Calu and Trafigura for continuing to work with us to progress the
completion of the Tahuehueto Mine. We believe their decision to convert a sizeable portion of their
loans into equity, which will result in Calu and Trafigura becoming the two largest shareholders,
demonstrates their confidence in management and Luca Mining’s development and growth plans.
The Company has offtake agreements in place with Trafigura for concentrate from both the Campo
Morado and Tahuehueto mines. Tahuehueto will achieve crucial milestones this year, and we also
expect our existing operation at Campo Morado to have a strong performance in 2023. The support
of existing and new investors is vital to making all this happen .”
All securities issued in connection with the Financing Package will be subject to a four month plus one
day hold period under applicable Canadian securities laws. The Financing Package is subject to the
approval of the TSXV.
Certain insiders of the Company are expected to participate in the Financing. This participation by
insiders in the Financing constitutes a related party transaction as defined under Multilateral
Instrument 61-101 -- Protection of Minority Security Holders in Special Transactions . However, the
Company considers such participation would be exempt from the formal valuation and minority
shareholder approval requirements of MI 61-101, as the fair market value of the Units subscribed for by
the insiders and the consideration for the Units paid by such insiders, would not exceed 25 per cent of
the Company's market capitalization.
The Private Placement will be available to existing securityholders of the Company utilizing BC
Instrument 45-534 - Exemption from Prospectus Requirements for Certain Trades to Existing
Securityholders and other provincial equivalents (collectively, the “ Existing Security Holder
Exemptions”). The Company will make the Private Placement available to all shareholders of the
Company as of March 31, 2023 (the “ Record Date ”) who are eligible to participate under the Existing
Security Holder Exemptions and who have notified the Company of their intention to participate in the
Private Placement. The Existing Security Holder Exemptions limit a shareholder to a maximum
investment of $15,000 unless the shareholder certifies in the subscription agreement that they have
obtained advice regarding the suitability of the investment from a registered investment dealer or
otherwise qualifies to rely on another private placement exemption.
In the subscription agreement, shareholders will be required to certify that, on or before the Record
Date, they acquired and held, Shares. Each existing shareholder on the Record Date will be entitled to
purchase Shares which will be allocated by the Company on a first come, first served basis such that it
is possible that a subscription received from a shareholder may not be accepted by the Company if the
Private Placement is over-subscribed. Any person who becomes a shareholder of the Company after
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the Record Date shall not be entitled to participate in the Private Placement under the Existing Security
Holder Exemptions.
In connection with the Private Placement, the Company intends to pay finders’ fees (the “Finders’ Fees”)
in cash and securities, as permitted by TSXV policy and applicable securities laws. It is expected the
Finder’s Fees will be paid in cash equal to 6% of the proceeds plus Warrants equal to 6% of the number
of Units placed by the applicable finder.
About Luca Mining Corp.
Luca Mining Corp. is a Canadian based mining company with two 100% owned Mexican gold, silver,
and base metal mining projects.
Luca’s Tahuehueto Gold Mine Project is in north-western Durango State, Mexico where construction of
an initial 500 tonnes per day (“tpd”) operation is well advanced. The second stage, the 1000 tpd project,
will follow immediately after commissioning the initial stage. The operation is generating gold, silver,
lead and zinc in concentrates.
Campo Morado is an operating polymetallic base and precious metals mine currently producing at an
average of 2,400 tpd, generating zinc and copper concentrates with significant precious metals credits.
Visit: www.lucamining.com
On Behalf of the Board of Directors
(signed) Mike Struthers
Mike Struthers,
CEO and Director
Cautionary Note Regarding Production Decisions and Forward-Looking Statements
It should be noted that Luca (then Altaley Mining Corporation) declared commercial production at Campo Morado and elected
to initiate construction to go into production at Tahuehueto prior to completing full feasibility studies demonstrating economic
and technical viability. Accordingly, readers should be cautioned that Luca’s production decisions have been made without
comprehensive feasibility studies of established reserves at Campo Morado and prefeasibility level reserves at Tahuehueto, such
that there is greater risk and uncertainty as to future economic results from the Campo Morado mine and at Tahuehueto mine
where reserves are established to the prefeasibility level of confidence and therefore a higher technical risk of failure than would
be the case if full feasibility studies were completed and relied upon to make production decisions. Luca has completed a
preliminary economic assessment (“PEA”) mining study on the Campo Morado mine and a prefeasibility study (‘PFS”) at
Tahuehueto mine that provides a conceptual life of mine plan and a preliminary economic analysis based on the previously
identified mineral resources (see News Release dated November 8, 2017, April 4, 2018, and April 25, 2022).
Statements contained in this news release that are not historical facts are "forward-looking information" or "forward-looking
statements" (collectively, "Forward-Looking Information") within the meaning of applicable Canadian securities laws. Forward-
Looking Information includes but is not limited to conditions or financial performance that are based on assumptions about
future economic conditions and courses of action; the timing and costs of future activities on the Company's properties, such as
production rates and increases; success of exploration, development and bulk sample processing activities, and timing for
processing at its own mineral processing facility on the Tahuehueto project site. In certain cases, Forward-Looking Information
can be identified using words and phrases such as "plans," "expects," "scheduled," "estimates," "forecasts," "intends," "anticipates"
or variations of such words and phrases. In preparing the Forward-Looking Information in this news release, the Company has
applied several material assumptions, including, but not limited to, that the current exploration, development, environmental
and other objectives concerning the Campo Morado Mine and the Tahuehueto Project can be achieved: the continuity of the
price of gold and other metals, economic and political conditions, and operations. Forward-Looking Information involves known
and unknown risks, uncertainties and other factors which may cause the actual results, performance, or achievements of the
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Company to be materially different from any future results, performance or achievements expressed or implied by the Forward-
Looking Information. There can be no assurance that Forward-Looking Information 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 Information. Except as required by law, the Company does not assume any obligation to release
publicly any revisions to Forward-Looking Information contained in this news release to reflect events or circumstances after the
date hereof or to reflect the occurrence of unanticipated events.
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.
For further information about Luca Mining Corp., please contact:
Glen Sandwell
Corporate Communications Manager
Tel: +1 (604) 684-8071