1 | Page Telson & Nyrstar Canada Execute Conditional Waiver Removing Loan from Default Status
Telson Mining Corporation
TSX.V: TSN OTC Pink: SOHFF
Frankfurt: TSGN.F
Shares Issued: 159,037,594
1 | Page
Telson & Nyrstar Canada Execute Conditional Waiver Removing Loan from Default Status
Vancouver, British Columbia, June 18, 2020
Telson Mining Corporation (“ Telson” or the “ Company” (TSX Venture Exchange -TSN, OTC Pink -SOHFF, Frankfurt -
TSGN (formerly SQ82)) is pleased to announce that it has entered into a letter agreement (the “ Nyrstar Letter
Agreement”) with Nyrstar Canada (Holdings) Ltd., (“Nyrstar”) in which Nyrstar has provided Telson a conditional
waiver to Telson’s default status of the June 12, 2018 L oan Agreement, entered into between the companies, as
amended (the “Nyrstar Loan Agreement”).
In a press release dated April 17, 2020, Telson announced that it had entered into a waiver request letter agreement
with Trafigura Mexico SA de CV , (the “Trafigura Letter Agreement”) where Telson agreed to transfer all its assets in
the Campo Morado project and its assets in the Tahuehueto proje ct to the trustee of the Trust Agreement (the
“Trust”) so as to secure all of its Trafigura loan obligation and Tr afigura waived past and forgoing default s under
Trafigura’s loan agreement with Telson , deferring interest and principal pay ments until June 30, 2021. This Trust is
in the process of being established.
Under the terms of the Nyrstar Letter Agreement, Telson acknowledges that it is in default of its obligations under
the Nyrstar Loan Agreement and as an inducement for Nyrstar to enter int o the Nyrstar Letter Agreement granting
the waivers, Telson, with Trafigura consent, has agreed to accept Nyrstar into the Trust thereby granting full security
to Nyrstar subordinate t o Trafigura and new secured lender(s) that may provide debt funding that fund the final
Tahuehueto mine construction costs.
The Nyrstar Letter Agreement further provides,
• Nyrstar’s conditional approval and consent to allow Telson to avoid a cause for default by granting Telson a
waiver, forgoing defaults under the Nyrstar Loan Agreement, and deferring interests and principal payments
until June 30, 2021.
• This waiver eliminates the Nyrstar Loan Agreements restriction on Telson for disposition of assets, if necessary,
to generate cash to allow Telson to repay its loan obligations to Nyrstar.
• Nyrstar agrees to restructure Telson’s entire loan debt obligation under terms and conditions to be negotiated
on good faith by both parties based on market conditions and updated cash flow projections which confirm
either of Telson’s projects financial viability if,
a. the Tahuehueto Project is ramped up or,
b. the Campo Morado project successfully operates and shows monthly repayment of due obligations to
Nyrstar and Trafigura on at least 6 consecutive months in amounts not less to an aggregate of $300,000
per month, on a pro rata basis based on ou tstanding amounts due under the Loan Agreement with
Nyrstar and the Campo Morado Loan Agreement with Trafigura.
Telson Mining Corporation
TSX.V: TSN OTC Pink: SOHFF
Frankfurt: TSGN.F
Shares Issued: 159,037,594
2 | Page
c. If Telson successfully raises funding in a sufficient amount to fully fund the final construction and ramp
up of the Tahuehueto Project , which f unding amount and requirements for effective ramp up to be
independently verified by a mutually acceptable independent engineering consultant.
If Telson repays the total debt due to Nyrstar under the Nyrstar Loan Agreement, Nyrstar shall no longer be a
beneficiary of the Trust.
“Telson Management is very pleased to have successfully negotiated and executed both the Nyrstar Letter
Agreement and the Trafigura Letter Agreement to bring the Company out of it s respective loan default status and
conditionally defer interest and principle payments to June 30, 2021 .” states Mr. Ralph Shearing, President and CEO
of the Company, “ With Telson’s June 16, 2020 news release disclosing the e xecution of the US$12 million Medium
Term Loan Facility with Accendo Banco all efforts are being made to assist Accendo’s due diligence to allow this
loan to close and re start construction at our Tahuehueto Gold Mine while we continue to operate the Campo
Morado Mine in as efficient manner as possible to maximize its revenue.”
About Telson Mining Corporation
Telson Mining Corporation is a Canadian based mining company with two 100% owned Mexican gold, silver and
base metal mining projects.
Telson's Tahuehueto mining project, located in north -western Durango State, Mexico . Construction at Tahuehueto
has been advanced to an estimated 60-70% of completion and waiting for final funding to finish construction of the
processing plant and related assets to produce gold, silver, lead and zinc in concentrates within its own on -site
mineral processing facility, with a designed capac ity of at least 1,000 tonnes per day. The Company is targeting
completion of construction during 2021, six to eight months after securing final funding.
Campo Morado is a polymetallic base metal mine with mining and milling equipment capable of producing up to
2,500 tonnes per day. Four months after purchasing Campo Morado, Telson brought the mine back into operation
initiating preproduction in October 2017 and declared commercial production in May 2018, operating the mine
continuously for 22 months until August 2019 when the project was put on care and maintenance . . Telson brought
the mine out of care and maintenance and reinitiated mining and milling operations during late January 2020 ,
temporarily suspended operations during April and May 2020 as mandated by the Mexican Government for COVID-
19 precautions, and re-initiated Mining operations June 4, 2020 after mining was declared an essential service within
Mexico .
Visit: www.telsonmining.com
On Behalf of the Board of Directors
(signed) “Ralph Shearing”
Ralph Shearing, President, CEO and Director
Telson Mining Corporation
TSX.V: TSN OTC Pink: SOHFF
Frankfurt: TSGN.F
Shares Issued: 159,037,594
3 | Page
Cautionary Note Regarding Production Decisions and Forward-Looking Statements
It should be noted that Telson declared commercial production at Campo Morado prior to completing a feasibility study of mineral
reserves demonstrating economic and technical viability. Accordingly, readers should be cautioned that Telson’s production decision has
been made without a comprehensive feasibility study of established reserves such that there is greater risk and uncertainty as to future
economic results from the Campo Morado mine and a higher technical risk of failure than would be the case if a feasibility st udy was
completed and relied upon to make a production decision. Telson has completed a preliminary economic assessment (“PEA”) mining
study on the Campo Morado 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 and April 4,2018).
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 Looki ng
Information includes, but is not limited to, disclosure regarding the planned recommencement of mining operations at Campo Morado;
the ability to recommence outstanding payments to Nyrstar; and other possible events, 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 proces sing
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 by the use of words and phrases such as “plans”, “expects”, “scheduled”, “esti mates”, “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; that
recommencement of operations at Campo Morado will proceed as planned; that discussions with Nyrstar and the abeya nce of any
potential default proceedings will be completed in a timely manner and on reasonable terms , 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 Company to be material ly
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 Forwar d-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 refl ect 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 Telson Mining Corporation, please contact:
Glen Sandwell
Corporate Communications Manager
Tel: +1 (604) 684-8071