Santacruz Silver Announces the Closing of its Acquisition of Glencore’s Producing Bolivian Silver/Zinc Assets
TSX-V: SCZ
FSE: 1SZ
March 21, 2022
Santacruz Silver Announces the Closing of its Acquisition of Glencore’s Producing
Bolivian Silver/Zinc Assets
Vancouver, B.C. – Santacruz Silver Mining Ltd. (TSX -V:SCZ) ( “the Company” or “Santacruz”) is
pleased to announce that it has completed the acquisition of a portfolio of producing assets located in
Bolivia (the "Transaction") pursuant to a previously disclosed share purchase agreement dated October
11, 2021 (the “SPA”), as amended pursuant to an amendment agreement dated March 18, 2022 between
the Company and certain subsidiaries of Glencore plc (together, “Glencore”).
Arturo Prestamo Elizondo, Executive Chairman of Santacruz, stated: “The Transaction elevates the
Company into a multi asset producer and is accretive with the future cash flows of the mines financing the
acquisition. We have been working closely with Glencore and the Bolivian government to ensure a smooth
transition while the mines have generated sufficient cash flow to decrease the initial US$20 million upfront
consideration down to US$12,011,148 , which will be paid by Santacruz to Glencore within 30 days of
closing and will be paid from working capital. We look forward to elevating Santacruz into a leading mid-tier
silver producer while generating value for all stakeholders.”
Carlos Silva, CEO of Santacruz, stated: “This is a significant acquisition for Santacruz that creates a leading
mid-tier silver producer in the Americas. We are very pleased to team up with a great group of professionals
in Bolivia, where Glencore has performed extraordinary work while achieving very high standards in terms
of responsible mining practices and their commitment to responsible business and community relations.
We will ensure that this excellent legacy continues in the coming years.”
Key Transaction Highlights
• Creation of a significant Latin- American focused silver producer following acquisition of a robust
portfolio of producing, exploration and mining infrastructure assets;
• Initial upfront consideration of US$20 million, as adjusted pursuant to the purchase price
adjustments under the SPA (the “Closing Cash Payment”), was determined to be US$12,011,148
and will be paid by Santacruz to Glencore within 30 days of closing and will be paid from working
capital;
• Glencore agreed to provide the San Lucas business with a working capital facility in an amount up
to US$10 million; and
• For the 12 months ended December 31, 2021 the Assets (as defined below) produced
approximately 10.0 million silver equivalent ounces (on 100 percent basis)(1).
As previously disclosed in the Company’s press releases dated October 13, 2021 and November 15, 2021,
the transaction involved the acquisition of , among other things, a 100% interest in the Sinchi Wayra
business which includes the producing Caballo Blanco mining complex (" Caballo Blanco"), the Soracaya
exploration project located in Bolivia and the San Lucas ore sourcing and trading business , a 45% interest
in the producing Bolivar and Porco mining operations held through an unincorporated joint venture with
Corporación Minera de Bolivia, a Bolivian state- owned entity and certain related properties and assets
(together, the "Assets").
The Company expects to cover the Closing Cash Payment using the Company’s own cash flow. As a result,
the Company is no longer required to complete a financing to fund such upfront consideration.
In addition to the Closing Cash Payment, an additional US$90 million that is secured against the Assets is
payable to Glencore in equal installments over four years from the closing of the Transaction, subject to
certain conditions and adjustments (the “Deferred Consideration”). Glencore also retains: (a) a 1.5% net
smelter returns royalty on all assets other than the San Lucas business; (b) a 14% gross profit royalty on
the San Lucas business. Glencore has the right to acquire 100% of the offtake from the Assets in
accordance with offtake agreements entered into in connection with closing.
The Company has prepared technical reports in accordance with National Instrument 43- 101 – Standards
of Disclosure for Mineral Projects in respect of the Porco, Bolivar and Caballo Blanco mineral projects (the
“Technical Reports”) acquired from Glencore. The Technical Reports are now available on the Company’s
SEDAR profile. See the Company’s news release dated October 13, 2021 for a description of the Porco,
Bolivar and Caballo Blanco projects.
Further to the Company’s news releas e dated October 12, 2021, the Company has paid US$320,000 and
issued 3,077,317 common shares at a price of $0.41 per share to Big Buck Capital (“ BBC”) to settle
US$1,000,000 in services provided pursuant to the terms of a consulting services agreement with BBC.
The sole principal of BBC is Felipe Molina Bernal.
About Santacruz Silver Mining Ltd.
Santacruz is a Mexican focused silver company with one producing silver project, the Zimapan Mine and
two exploration properties, the La Pechuga property and Santa Gorgonia prospect. The Company is
managed by a technical team of professionals with proven track records in developing, operating and
discovering silver mines in Mexico. Our corporate objective is to become a mid-tier silver producer.
‘signed’
Arturo Préstamo Elizondo,
Executive Chairman
For further information please contact:
Mars Investor Relations
Telephone: (778) 999 4653
Arturo Préstamo Elizondo,
Santacruz Silver Mining Ltd.
Email: [email protected]
Telephone: (528) 183 785707
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: the expected benefits of the
Transaction and the Company’s plan to pay the Closing Cash Payment us ing the Company’s own cash
flow and payment of the Deferred Consideration.
Forward-looking information is based on plans, expectations and estimates of management at the date the
information is provided and is subject to cert ain factors and assumptions. In making the forward- looking
statements included in this news release, the Company has applied several material assumptions, including
that the Company's financial condition and development plans do not change as a result of unforeseen
events 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 t he assumptions referred to above
prove not to be valid or reliable; market conditions and volatility and global economic conditions, including
increased volatility and potentially negative capital raising conditions resulting from the continued or
escalation of the COVID-19 pandemic and risks relating to the extent and duration of such pandemic and
its impact on global markets; controls or regulations and political or economic developments in Bolivia; risk
of delay and/or cessation in planned work or changes in the Company's financial condition and development
plans; risks associated with the Company’s plan to undertake certain post -closing reorganization steps in
respect of the target entities ; the uncertainty of the geology, grade and continuity of mineral deposits and
the risk of unexpected variations in mineral resources, grade and/or recovery rates; risks related to gold,
silver, base metal and other commodity price fluctuations; employee relations; relationships with and claims
by local communities and indigenous populations; availability and increasing costs associated with mining
inputs and labour; the speculative nature of mineral exploration and development, including the risks of
obtaining necessary licenses and permits and the presence of laws and regulations that may impose
restrictions on mining; risks relating to environmental regulation and liability; the possibility that results will
not be consistent with the Company's expectations, as well as the other risks and uncertainties applicable
to mi neral 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.
(1) Silver equivalent ounces produced for the past 12 months ended December 31, 2021 have been
calculated using prices of US$24. 07/oz, US$ 1.29/lb, US$ 0.98/lb for Silver, Zinc and Lead respectively
applied to the metal content of the concentrates produced by the Assets.