Telson Resources Inc. Initiates Activities for Restart of Mining Operations at Campo Morado and Closes Final Tranche of Private Placement
Telson Resources Inc. Initiates Activities for Restart of Mining Operations at
Campo Morado and Closes Final Tranche of Private Placement
Vancouver, British Columbia, July 20, 201 7 – Telson Resources Inc. (“ Telson” or the “Company”) (TSX
Venture – TSN.V) is pleased to announce that it has closed the final tranche of the private placement as
announced in a press release dated June 14, 2017 and accordingly has issued 1,732,691 shares at 55 cents per
share, and paid an additional US$700,000 to Nyrstar Mining which concludes all payments that were currently
due under the agreement terms as summarized in the former referenced press release.
The funding was received from Estr atégica Corporativa en Finanz as, a related party of the Company. The
related party is a significant shareholder with a control posit ion in the Company, for which the Company
previously received shareholder consent in late 2015, in accordance with TSXV policy. The issuance of private
placement securities to a ‘non-arms’ length party also constitutes a related-party transaction under Multilateral
Instrument 61-101 (“MI 61-101”). Because the Company’s shares t rade only on the TSXV, the issuance of
securities is exempt from the formal valuation requirements of Section 5.4 of MI 61-101 pursuant to Subsection
5.5(b) of MI 61-101 and fits within an exemption from the minor ity approval requirements of Section 5.6 of
MI 61-101.
With the successful acquisition of 100% of the Campo Morado Mine, Telson has initiated the hiring and training
of personnel whom are currently servicing all milling and mining equipment located at the mine site. Internal
technical mine plan studies are advancing in preparation for restarting mining operations at Campo Morado.
Although during Campo Morado’s la st full production year of 201 4 only zinc and copper concentrates were
recovered using room and pillar mining methods, Telson is planning to restart mining operations employing block
caving mining methods to potentially reduce mining costs with a n emphasis on maximizing recoveries of all
economic metals including gold, silver, zinc, lead and copper. Additionally, Telson is planning to focus mining
activities to zones outlined within the defined resources where higher precious metal content is available.
Telson is also conducting preliminary leach testing on tailings collected from the tailings dam. If preliminary
testing proves positive, Telson will initiate industrial scale leach testing of existing tailings and will investigate
the possibility of adding a leach circuit to the mill design wh ich could significantly increase recovery of
precious metals on an ongoing basis.
Telson intends to fund its startup mining activities at Campo Morado with potential off-take prepayment loan
funding where negotiations with concentrate buyer(s) are at an advanced stage to secure up to US$7 million of
operating capital. If offtake f unding is achieved successfully the company hopes to initiate mining at Campo
Morado within three months.
The Campo Morado Mine is a fully equipped underground multi-metal mine located in Guerrero State, Mexico,
with infrastructure, installations and equipment capable of processing 2,500 metric tonnes of ore per day. The
property area comprises approximately 12,045 hectares in six mining concessions that are some 160 kilometers
south-southwest of Mexico City. Previous exploration conducted by both Nyrstar and Farallon at Campo Morado
has consisted of 577,155 cumulative metres of diamond drilling in 3,036 surface and underground diamond drill
holes, extensive geochemical and geophysical surveying (gravity , magnetic, IP and radiometric), metallurgy,
geological mapping etc.
Telson Resources Inc.
TSX.V: TSN OTCBB: SOHFF
Shares Issued: 104,149,005
The most recent NI 43-101 compliant mineral resources as publicly disclosed by Nyrstar on April 29, 2015 is
shown below.
(This table presents depleted resources and does not include the mined-out former resources of the G9 and G9
Del Oro zones.)
The Campo Morado Mine was commissioned by Farallon Mining and commenced operations in 2009. In 2010
Nyrstar Mining purchased Farallon Mining in a friendly takeover bid valued at C$409 million and thereby took
100% ownership of the project. Nyrstar suspended production in January 2015 and the mine was placed on care
and maintenance.
During 2014, the mine processed 657,000 tons of ore with an average grade of 1.2g/t Au, 115.7 g/t Ag, 4.6% Zn,
1.2% Cu and 0.9% Pb. The concentrates produced in the same year were 48,000 tons of Zn concentrate at 47%
Zn and 29,000 tons of Cu concentrate at 13%.
On behalf of the board of directors
(signed) “Ralph Shearing”
Ralph Shearing, P.Geol
President
Qualified Person
This press release was prepared under the supervision and revie w of Ralph Shearing, P.Geol., President and
Director of Telson Resources Inc., a Professional Geologist reg istered in 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, “Forw ard-Looking Information”) within the meaning of
applicable Canadian securities laws. Forward Looking Information includes, but is not limited to, disclosure
regarding possible events, conditions or financial perfor mance that is based on assumptions about future
economic conditions and courses of action; the timi ng and costs of future activities on the Company’s
properties; success of exploration, development and bulk sample processing activities; anticipated results of
check assay results; and processing plans at the Atocha Mineral Processing Plant for mineralized material
from the Company’s Tahuehueto project. 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 several material assumptions, including, but not limited to, that the
current exploration, development, environmental and other objectives concerning the Tahuehueto Project can
be achieved; that the implementation of the selective mining method will prove feasible based on the results of
the bulk sample; that the mineral processing plant recen tly acquired by the Company will be successfully
installed and commissioned, the con tinuity of the price of gold and other metals, economic and political
conditions and operations. Forward- Looking Information involves know n and unknown risks, uncertainties
and other factors which may cause the actual results, p erformance or achievements of the Company to be
materially different from any future results, perform ance 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 assu me 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.
Cautionary Note Regarding References to Resources and Reserves
This news release uses the terms "measured and indi cated resources" and "inferred resources". We advise
U.S. investors that while these term s are defined in, and permitted by, Canadian regulations, these terms are
not defined terms under SEC Industry Guide 7 and not normally permitted to be used in reports and
registration statements filed with the SEC. "Inferred resources" have a great amount of uncertainty as to their
existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any
part of an inferred mineral resource will ever be upgrade d to a higher category. Under Canadian rules,
estimates of inferred mineral resources ma y not form the basis of a feasibility study or prefeasibility studies,
except in rare cases. The SEC normally only permits issuers to report minera lization that does not constitute
SEC Industry Guide 7 compliant "reserves", as in-place tonnage and grade without reference to unit measures.
U.S. investors are cautioned not to assume that any par t or all of mineral deposits in this category will ever
be converted into reserves. U.S. in vestors are cautioned not to assume that any part or all of an inferred
resource exists or is economically or legally minable.
Contacts
Glen Sandwell, Telson Resources Inc.
Corporate Communications
Tel: +1(604)684-8071