Santacruz Silver Amends Terms of Option Agreement on the Veta Grande Project and Enters Option Agreement for its Zacatecas Mineral Assets with Carrizal Mining
TSX.V: SCZ
FSE: 1SZ
December 14, 2017
Santacruz Silver Amends Terms of Option Agreement on the Veta Grande Project and Enters
Option Agreement for its Zacatecas Mineral Assets with Carrizal Mining
Vancouver, B.C. – Santacruz Silver Mining Ltd. (TSX .V:SCZ) (the “Company” or “Santacruz”) announces
that it has reached agreement with the Contracuña g roup of companies (“Contracuña”) to amend the term s of
the Option Agreement (see press release dated June 21, 2017) to acquire 100% ownership of the Veta
Grande Project, including the Veta Grande mine and milling facility as well as the Minillas property l ocated in
Zacatecas, Mexico.
Details of the payment schedule per the amended Opt ion Agreement are as follows:
1. US$500,000 paid on December 13, 2017;
2. US$500,000 on or before December 13, 2018;
3. US$2,500,000 on or before December 13, 2019;
4. US$2,500,000 on or before December 13, 2020;
5. US$5,000,000 on or before December 13, 2021; and
6. US$4,500,000 on or before December 13, 2022;
In addition the Company has granted to Contracuña a 1% net smelter royalty (“NSR”) that commences
December 14, 2022. The Company has the right to acq uire the NSR at any time by paying Contracuña
US$1,500,000.
Zacatecas Mineral Assets Option Agreement
In addition, the Company advises that it has concu rrently entered into a binding letter of intent (th e “LOI”) with
Carrizal Mining, S.A. de C.V. (“Carrizal”), a priva te Mexican silver producing Company, pursuant to wh ich
Carrizal will acquire a 20% working interest in the Veta Grande Project, as well as the Zacatecas Prop erties
under option by Santacruz from Golden Minerals Comp any (see press release dated May 4, 2016)
(collectively the “Zacatecas Mineral Assets”). Car rizal may earn its 20% working interest by funding 100% of
the cost to increase the capacity of the Veta Grand e milling facility to 750 tpd (expected to be by th e end of Q1
2018), as well as providing a surface diamond drill rig and drilling materials to conduct exploration drill
campaigns at the Veta Grande mine, proximate to the Company’s current mining activities, and at the Na vidad
property and Panuco Deposit. In addition Carrizal is providing a short-term working capital advance o f
US$500,000. Following Carrizal completing the required earn-in expenditures, a 20:80 joint venture between
Carrizal (20%) and Santacruz (80%) will be formed.
“The Zacatecas Mineral Assets represent one of the l argest and most historically important land package s
within Mexico´s Zacatecas silver belt and we are ve ry pleased to have reached this agreement with
Contracu ña which provides us greater flexibility to consolida te our mineral interests,” stated Arturo Préstamo,
President and CEO of Santacruz. “In addition, our joint venture with Carrizal is an important milesto ne in our
plan to grow our Zacatecas operations into a signif icant silver producer, and we look forward to its c ontinued
development as part of Santacruz's transition into a mid-tier Mexican silver producer .”
Carlos Silva, CEO of Carrizal and COO of Santacruz, stated "Carrizal is very pleased to be partnering with
Santacruz on this significant mineral portfolio in Mexico,” Mr. Silva continued “We intend to grow thi s asset
base by developing a methodical and achievable mine plan and then executing it."
About Santacruz Silver Mining Ltd.
Santacruz is a Mexican focused silver company with two producing silver projects (Rosario, including t he
Cinco Estrellas property and Membrillo Prospect, an d the Veta Grande mine and milling facility); and t wo
exploration properties including the Minillas prope rty and Zacatecas properties. The Company is manage d by
a technical team of professionals with proven track records in developing, operating and discovering s ilver
mines in Mexico. Our corporate objective is to become a mid-tier silver producer.
About Carrizal Mining, S.A. de C.V.
Carrizal is a Mexican privately owned company which operates the Zimapan mine in Zimapan Hidalgo Mexic o.
The company runs a 3,200 tpd mill and produces appr oximately 5.5 million silver equivalent ounces a year.
‘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: (604) 569-1609
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.
Rosario Project
The decisions to commence production at the Rosario Mine, Cinco Estrellas Property and Membrillo Prosp ect
were not based on a feasibility study of mineral re serves demonstrating economic and technical viabili ty, but
rather on a more preliminary estimate of inferred m ineral resources. Accordingly, there is increased
uncertainty and economic and technical risks of fai lure associated with this production decision. Prod uction
and economic variables may vary considerably, due t o the absence of a complete and detailed site analy sis
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 min eral
reserves demonstrating economic and technical viabi lity. Accordingly, there is increased uncertainty and
economic and technical risks of failure associated with this production decision. Production and econ omic
variables may vary considerably due to the absence of a complete and detailed site analysis according to and
in accordance with NI 43-101.