Santacruz Silver Amends Contracuña Option Agreement and Short-term Loan Agreement
TSX.V: SCZ
FSE: 1SZ
August 29, 2018
Santacruz Silver Amends Contracuña Option Agreement and Short-term Loan Agreement
Vancouver, B.C. – Santacruz Silver Mining Ltd. (TSX.V:SCZ) (the “Company” or “Santacruz”)
announces that it has reached agreement with the Contracuña group of companies (“Contracuña”)
to amend the payment terms of the Contracuña Option Agreement. In addition , the Company has
reached agreement to amend the repayment terms of the US$ 2.3 million sh ort-term loan (“the
Loan”) it has with a private Bolivian mining company.
Contracuña Option Agreement
The Company and Contracuña have agreed to amend the terms of the Option Agreement (see
press releases dated June 21 and December 14, 2017) to acquire 100 % ownership of the Veta
Grande Project, including the Veta Grande mine and milling facility as well as the Minillas property
located in Zacatecas, Mexico.
Details of the payment schedule per the amendment to the Option Agreement are as follows:
1. US$500 paid on December 13, 2017 (paid);
2. US$100 on or before October 1, 2018;
3. US$100 on or before November 1, 2018;
4. US$750 on or before December 13, 2018;
5. US$1,400 on or before August 31, 2019;
6. US$3,000 on or before December 2, 2019;
7. US$3,000 on or before December 2, 2020;
8. US$4,000 on or before December 2, 2021; and
9. US$4,250 on or before December 2, 2022;
The October 1 and November 1, 2018 payments of $100 relate to amounts included in accounts
payable as at June 30, 2018 and accordingly payment of these amounts will be offset by a reduction
in trade debt. The August 31, 2019 payment of $1.4 million is secured by a promissory note issued
by the Company to Contracuña and relates to the reclassification of certain trade debt owing to
Contracuña. The referenced trade debt balance is included in the Company’s acc ounts as at June
30, 2018. All other terms of the Option Agreement remain unchanged.
Short-term Loan Agreement
Santacruz has reached agreement with the private Bolivian mining company holding the Loan (see
press release dated March 7, 2018) to amend the repayment terms. Pursuant to the amended terms
the principal balance of US$2.3 million is now to be repaid October 1, 2018 (previously July 1,
2018). In addition, effective July 1, 2018 the interest rate increases from 9% to 12% per annum.
Further, subject to TSX Venture Exchange approval, the Company has agreed to extend to March 6,
2020 the expiry date of 2,000,000 warrants previously issued to the lender. The exercise price o f
the warrants remains unchanged at $0.16 per share.
About Santacruz Silver Mining Ltd.
Santacruz is a Mexican focused silver company with two pr oducing silver projects ( Veta Grande
Project and Rosario Project) and two exploration properties (Minillas P roperty and Zacatecas
Properties). The Company’s corporate objective is to become a mid-tier silver producer.
“signed”
Arturo Préstamo Elizondo,
President and CEO
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. F orward-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 C ompany 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, 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 o f 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 prove
not to be valid or reliable, which could result in lower revenue, higher cost, or lower production levels; delays
and/or cessation in planned work; changes in the Company's financial condition and development plans;
delays in regulatory approval; risks associated with the interpretation of data (including in respect of the third
party mineralized material) regarding the geology, grade and conti nuity 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 production 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 failure associated with this production decision. Production
and economic variabl es 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 commence production at Veta Grande Project was not based on a feasibility study on mine ral
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.