Telson Secures US$15 Million Loan Facility and Offtake Agreement with Trafigura and is Now Fully Funded to Finalize Mine Construction at Tahuehueto
Telson Resources Inc.
TSX.V: TSN OTCBB: SOHFF
Frankfurt: SQ82
Shares Issued: 124,218,120
Page 1 of 3
Telson Secures US$15 Million Loan Facility and Offtake Agreement with Trafigura
and is Now Fully Funded to Finalize Mine Construction at Tahuehueto
Vancouver, British Columbia, December 18, 2017.
Highlights:
Executed secured loan facility with Trafigura for US$15 million for Tahuehueto mine construction.
Funding enables construction of mineral processing facility, re lated mining facilities, plus
infrastructure and underground development at Tahuehueto
Funds Available to the Company in Three Tranches According to Development Progress and certain
conditions with first tranche of US$7.5Mn already received in Telson´s bank account.
The Offtake Agreements are for 100% production of zinc (Zn) and lead (Pb) concentrates with a
minimum annual fixed tonnage, starting delivery in January 2018 and ongoing until December 2022
Telson Resources Inc. ("Telson" or the "Company") (TSX Venture – TSN.V) is very pleased to announce it has
entered into a Loan Facility and Offtake Agreement with Trafigu ra Mexico S.A. de C.V. (“Trafigura”), a market
leader in the global commodities industry, to sell 100% of the lead and zinc concentrate produced at the Tahuehueto
Mine from January 1st 2018 to December 31st 2022. Trafigura has provided Telson with a credit facility of US$15
million thereby securing the capital requirements to construct and operate an ongoing 1,000 tonne per day mining
operation at Tahuehueto. The Signing Date was on December 7, 2017.
Key Terms:
US$15 Million Loan Facility
Three‐year term with twelve‐month grace period followed with 24 repayment installments.
Loan Facility Matures on December 2020 with very competitive interest rates.
No hedging conditions
No equity based payments
US $ 15 Million available in three tranches as follows,
1st Tranche ‐ US$7.5 million has been received by the Company
2nd Tranche ‐ US$5.0 million will be available 4 months from the Signing Date and not later than 6
months after the Signing Date.*
3rd Tranche ‐ US$2.5 million will be available 6 months from the Signing Date and not later than 9
months after the Signing Date.*
Offtake Agreement
60‐month term ending December 2022 for Tahuehueto Pb and Zn concentrate production
Fixed minimum tonnage to be sent during the offtake term
Very Competitive industry payable metal terms at LME and LBMA Spot prices
Access to prompt payments 5 days after delivery, providing excellent liquidity to the operation
Competitive transport charges
Telson Resources Inc.
TSX.V: TSN OTCBB: SOHFF
Frankfurt: SQ82
Shares Issued: 124,218,120
Page 2 of 3
Telson has provided industry standard security to Trafigura in the form of a corporate guarantee, a promissory note
plus a pledge of the mining concessions and fixed assets of Tel sons 100% owned subsidiary company Real de la
Bufa, S.A. de C.V. The extent of Telson’s liability to Trafigura within the Agreements under Mexican law is limited
to the amount of the offtake loan plus interest.
Antonio Berlanga, CEO of Telson, states “We are extremely happy to once again announce to our shareholders a
major strategic funding and offtake agreement. This prepayment facility provided by Trafigura allows us to initiate
construction of our pla nned 1000 tonne per day mineral processi ng facility plus related infrastructure on the
Tahuehueto project site. We have already advanced more than 400 m of underground development on the mine plan
and previously purchased more than 85% of the mill equipment wh ich has been in storage in Tepehuanes. Our
current construction plans are targeting to complete mine and m ill construction late 2018 and then start to process
gold and silver in lead and zinc concentrates at the project si te. This prepayment facility and offtake agreement
demonstrates the confidence our major concentrate buyer has in the Tahuehueto project and our ability to rapidly
construct the mine and mill thereon.”
* The second loan facility draw down tranche as outlined in the Key Terms above, requires Telson to secure
additional funding of US $5 million in the form of equity and/o r loan and that at least US $4.5 million these funds
have been invested on the Tahuehueto projects’ capital expendit ures and the third loan facility draw down of US
$2.5 million requires Telson to secure additional funding of US $2.5 million in the form of equity and/or loan and
evidence that at least US $2 million these funds have been invested on the Tahuehueto projects’ capital expenditures.
Management points out that the Company still has available at l east US$5 million from its Line Of Credit with its
major shareholder as originally announced in a press release da ted July 27, 2016 and thereby can draw down the
US $5 million required to secure the second tranche on the current Trafigura loan facility.
About Trafigura
Founded in 1993, Trafigura is one of the largest physical commo dities trading groups in the world. Trafigura
sources, stores, transports and delivers a range of raw materials (including oil and refined products and metals and
minerals) to clients around the world. The trading business is supported by industrial and financial assets, including
49.6 percent owned global oil products storage and distribution company Puma Energy; global terminals,
warehousing and logistics operator Impala Terminals; Trafigura' s Mining Group; and Galena Asset Management.
The Company is owned by around 600 of its 3,935 employees who w ork in 62 offices in 35 countries around the
world. Trafigura has achieved substantial growth over recent ye ars, growing revenue from USD12 billion in 2003
to USD136.4 billion in 2017. The Group has been connecting its customers to the global economy for more than
two decades, growing prosperity by advancing trade. Visit: www.trafigura.com
About Telson Resources Inc.
Telson Resources Inc. is a Canadian based mining company produc ing gold, silver and base metal from its two
Mexican Mine Projects. Telson's Tahuehueto Project, located in north-western Durango State, Mexico and its
recently acquired Campo Morado Mine in Guerrero, Mexico are bot h polymetallic deposits containing significant
gold, silver, lead, zinc and copper. Telson is currently mining and procession ore at its 100% owned Campo Morado
Mine at a rate of approximately 1,400 tonnes per day and at its 100% owned Tahuehueto Mine Project at a rate of
approximately 150 tonnes per day and direct shipping Tahuehueto preproduction ore to a toll mill for processing
off-site.
Visit: www.telsonresources.com
Telson Resources Inc.
TSX.V: TSN OTCBB: SOHFF
Frankfurt: SQ82
Shares Issued: 124,218,120
Page 3 of 3
On behalf of the board of directors
(signed) “Ralph Shearing”
Ralph Shearing, P.Geol, President and Director
Qualified Person
This press release was prepared under the supervision and review of Ralph Shearing, P.Geol., President and Director
of Telson Resources Inc., a Professional Geologist registered i n Alberta as a member of the professional
organization APEGA, and a Qualified Person as defined by NI 43-101.
Cautionary Note Regarding Forward-Looking Statements
Statements contained in this news release that are not historical facts are “forward-looking information” or
“forward-looking statements” (collectively, “Forward-L ooking Information”) within the meaning of applicable
Canadian securities laws. Forward Looking Information in cludes, but is not limited to, disclosure regarding
possible events, conditions or financial performance that is based on assumptions about future economic conditions
and courses of action; the timing and costs of future activ ities on the Company’s properties, such as production
rates and increases; success of explora tion, development and bulk sample processing activities; timing for the
restart of continuous mining operations at the Campo Mo rado Mine, and timing for processing at its own mineral
processing facility on the Tahuehueto project site. In certain cases, Forward-Looking Information can be identified
by the use of 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 severa l material assumptions, including, but not limited to, that the current
exploration, development, environmental and other obj ectives concerning the Campo Morado Mine and the
Tahuehueto Project can be achieved, th e 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 act ual results, performance or achievements of the Company to be materially
different from any future results, performance or achievem ents expressed or implied by the Forward-Looking
Information. There can be no assurance that Forward-Look ing 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 Inform ation. 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
For further information about Telson Resources Inc., please contact:
Glen Sandwell
Corporate Communications Manager
Tel: +1 (604) 684-8071