Santacruz Silver Acquires 50% Interest In Carrizal Mining
Santacruz Silver Mining Ltd. Suite 880-580 Hornby Street Vancouver, BC V6C 3B6 Telephone (604) 569-1609
July 02, 2019
TSX.V: SCZ
FSE: 1SZ
Santacruz Silver Acquires 50% Interest In Carrizal Mining
Vancouver, B.C. – Santacruz Silver Mining Ltd. (TSX.V:SCZ) (the “Company” or “Santacruz”) announces
that, further to its press release of May 22, 2019 , Santacruz, through its wholly-owned subsidiary Carrizal
Holdings Ltd., has acquired a 50% shareholding in PCG Mining, S.A. de C.V. (“PCG”) which is a holding
company that owns 100% of Carrizal Mining, S.A. de C.V. (“Carrizal”), a private Mexican mining company.
The shares were purchased from one of PCG’s shareholders who is at arm's -length to Santacruz (the
"Vendor").
Consideration for the share acquisition was as follows:
1. A cash payment by Santacruz to the Vendor of US$500,000;
2. The forgiveness of approximately US$264,000 in debt owed by the Vendor to Carrizal; and
3. Other consideration in the aggregate amount of approximately US$680,000, including the transfer
of a life-insurance policy and three vehicles from Carrizal to the Vendor, valued at US$494,000 and
US$180,000 respectively.
As previously reported, the Company entered into a parallel agreement, with binding effect as of May 21,
2019, to acquire the remaining 50% of the outstanding shares of PCG that are owned by Carlos Silva (the
“Silva Acquisition”), Santacruz’s COO. The consideration to be paid by Santacruz to Mr. Silva with respect
to the Silva Acquisition is 30,000,000 shares of Santacruz (the “Consideration Shares”) at a deemed price
of CDN$0.05 per share.
The Silva Acquisition remains subject to receipt of final approval from the TSX Venture Exchange (the
"Exchange"), as well a s the Company obtaining approval from the disinterested shareholders of the
Company pursuant to Exchange requirements, since the Consideration Shares will represent more than
10% of the Company's outstanding shares prior to closing. Carlos Silva does not currently hold any common
shares of the Company. On completion of the Silva Acquisition, Mr. Silva would hold 30,000,000 common
shares of the Company representing approximately 14.7 % of the Company's then issued and outstanding
shares (assuming no other shares are issued subsequent to the date hereof ot her than the Consideration
Shares).
Carrizal’s assets include a 20% working interest in the Company’s Veta Grande Project. The primary reason
for the Company to acquire PCG is to effectively buy-back such 20% interest and regain 100% ownership
rights of the subject property interests.
Carrizal also operates the Carrizal and Mina Monte mines (collectively the “Zimapan Mine”) (34 mining
concessions covering an area of 5,139 ha) located seven kilometers northwest from the town of Zimapan,
Hidalgo, Mexico under a 10 -year lease agreement with Minera Cedros, S.A. de C.V. (“Minera Cedros”), a
wholly-own subsidiary of Grupo Peñoles, S.A.B. de C.V. Unless otherwise amended or extended, the lease
agreement with Minera Cedros expires on July 31, 2019. The Comp any understands that Carrizal and
Minera Cedros are currently in negotiations with respect to Carrizal acquiring outright the Zimapan Mine
from Minera Cedros. This is an additional potential benefit from acquiring Carrizal but there can be no
assurance that Carrizal will be successful in completing such acquisit ion. Accordingly, the acquisition by
Carrizal of the Zimapan Mine is not a condition to completing the Silva Acquisition.
Arturo Prestamo, Santacruz’s CEO stated, "The acquisition of a 50% interest in Carrizal is an important first
step towards returning to 1 00% ownership rights in the Veta Grande Project , subject to receiving the
necessary approvals to complete the purchase of the remaining 50% of Carrizal. It also offers the Company
a chance to acquire an indirect interest in an operating mine in a potentially accretive transaction that could
enhance Santacruz´s operations.”
Santacruz Silver Mining Ltd. Suite 880-580 Hornby Street Vancouver, BC V6C 3B6 Telephone (604) 569-1609
All scientific and technical information contained in this news release has been reviewed and approved by
Van Phu Bui, P.Geo., who is an independent consultant of the Company and a "qualified person" within the
meaning of National Instrument 43-101 Standards of Disclosure for Mineral Projects.
About Santacruz Silver Mining Ltd.
Santacruz is a Mexican focused silver company with two producing silver projects (Veta Grande Project and
Rosario Project) and two exploration properties (Minillas Property and Zacatecas Properties , which are
associated with the Veta Grande Project ). The Company is managed by a technical team of professionals
with proven track records in de veloping, operating and discovering silver mines in Mexico. Our corporate
objective is to become a mid-tier silver producer.
‘signed’
Arturo Préstamo Elizondo,
President, Chief Executive Officer and Director
For further information please contact:
Arturo Prestamo
Santacruz Silver Mining Ltd.
Email: [email protected]
Telephone: (011) (52) 81 8378 5707
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 release.
Forward looking information
Certain statements contained in this news release constitute "forward -looking information" as such term is
used in applicable Canadian securities laws , including statements relating to completion of the Silva
Acquisition. Forward-looking information is based on plans, expectations and estimates of management at
the date the information is provided and is subject to certain factors and assumptions. In making the
forward-looking statements included in this news release, the Company has applied several material
assumptions, that the Company's financial condition and development plans do not change as a result of
unforeseen events, that third party mineralized material to be milled by the Company will have properties
consistent with management's expectations, that the Company will receive all required regulatory approvals,
including approval of the Exchange in respect of the Silva Acquisition, and that future metal prices and the
demand and market outlook for metals will remain stable or improve. Forward-looking information is subject
to a variety of risks and uncertainties and other factors that could cause plans, estimates and actual results
to vary materially from those projected in such forward -looking information. Factors that could cause the
forward-looking information in this news release to change or to be inaccurate include, but are not limited
to, the risk that any of the assumptions referred to above prove not to be valid or reliable, which could result
in lower reve nue, higher cost, or lower production levels; delays in and/or failure to obtain necessary
regulatory and shareholder approvals of the Silva Acquisition ; delays and/or cessation in planned work;
Santacruz Silver Mining Ltd. Suite 880-580 Hornby Street Vancouver, BC V6C 3B6 Telephone (604) 569-1609
changes in the Company's financial condition and development plans; risks associated with the
interpretation of data (including in respect of the third party mineralized material) regarding the geology,
grade and continuity of mineral deposits; the possibility that results will not be consistent with the Company's
expectations, as well as the other risks and uncertainties applicable to mineral exploration and development
activities and to the Company as set forth in the Company's continuous disclosure filings filed under the
Company's profile at www.sedar.com. There can be no assurance that any forward-looking information will
prove to be accurate, as actual results and future events could differ materially from those anticipated in
such statements. Accordingly, the reader should not place any undue reliance on forward -looking
information or statements. The Company undertakes no obligation to update forward-looking information or
statements, other than as required by applicable law.
Rosario Project
The decisions to commence product ion at the Rosario Mine , Cinco Estrellas Property and Membrillo
Prospect were not based on a feasibility study of mineral reserves demonstrating economic and technical
viability, but rather on a more preliminary estimate of inferred mineral resources. Accordingly, there is
increased uncertainty and economic and technical risks of f ailure associated with this production decision.
Production and economic variables may vary considerably, due to the absence of a complete and detailed
site analysis according to and in accordance with NI 43-101.
Veta Grande Project
The decision to commenc e production at Veta Grande Project was not based on a feasibility study on
mineral reserves demonstrating economic and technical viability. Accordingly, there is increased
uncertainty and economic and technical risks of failure associated with this production decision. Production
and economic variables may vary considerably due to the absence of a complete and detailed site analysis
according to and in accordance with NI 43-101.