Sierra Madre Announces Closing of Definitive Acquisition of LA Guitarra
SIERRA MADRE ANNOUNCES CLOSING OF DEFINITIVE ACQUISITION
OF LA GUITARRA
Vancouver, British Columbia – March 30, 2023 – Sierra Madre Gold and Silver Ltd. (TSXV: SM) (" Sierra
Madre" or the "Company") is pleased to announce that, pursuant to the share purchase agreement dated
May 25, 2022, as amended and restated on October 28, 2022 (the “Share Purchase Agreement”), among
the Company, First Majestic Silver Corp. (“ First Majestic”) and Corporacion First Majestic, S.A. de C.V.
(“CFM”), the Company has completed its previously announced acquisition (the “ Acquisition”) of La
Guitarra Compania Minera S.A. de C.V. (“Subco”), an indirect wholly-owned subsidiary of First Majestic
incorporated under the laws of Mexico, that holds a 100% interest in the La Guitarra silver-gold property
(the “La Guitarra Property”), as described in the Company’s news releases dated May 25, 2022, November
1, 2022, December 28, 2022, and March 21, 2023 (collectively, the “ Prior News Releases ”) and the
Company's information circular dated November 8, 2022 (the "Circular").
The Company will continue to be classified as a Tier 2 Mining Issuer on the TSX Venture Exchange (the
“TSXV”). The common shares of the Company (the “Common Shares”) are expected to resume trading on
the TSXV under the symbol “SM” following the closing of the Common Share Offering (defined below).
Escrow Restrictions
Under the terms of the Share Purchase Agreement, and as further described in the Circular, the Company
acquired all of the issued and outstanding shares of Subco in exchange for the Company issuing to First
Majestic 69,063,076 Common Shares ( the “Consideration Shares ”) at a deemed price of $0.65 per
Consideration Share.
As described in the Circular, First Majestic may distribute all Consideration Shares in excess of a 19.9%
ownership position of Sierra Madre (on a non-diluted basis) pro-rata to First Majestic’s shareholders (the
“Excess Shares”). Following the closing of the Acquisition, First Majestic has retained a participation right
to maintain its pro-rata interest in the Company (to a maximum of 19.9%) in any future share issues of the
Company, subject to customary exceptions. The Consideration Shares held by First Majestic are subject to
the following contractual resale restrictions, in addition to applicable securities laws resale restrictions and
TSXV policies:
Release Dates
Proportion of Total Escrowed Securities to
be Released
September 29, 2023 25%
March 29, 2024 25%
September 29, 2024 25%
March 29, 2025 25%
The contractual resale restrictions above will not apply to the Excess Shares, which will remain subject to
customary carve-outs in the event of a takeover bid or merger or acquisition transaction involving the
Common Shares.
Concurrent Financing
On September 8, 2022, the Company completed the first tranche (the “First Tranche”) of a “best efforts”
brokered private placement financing (the “Private Placement”) pursuant to an agency agreement dated
September 8, 2022 (the “ Agency Agreement”) with Beacon Securities Limited and Canaccord Genuity
Corp. on behalf of a syndicate of agents including Haywood Securities Inc.
Pursuant to the Agency Agreement, the Private Placement is compromised of (i) subscription receipts of
the Company (the “Subscription Receipts”) at a price of $0.65 per Subscription Receipt (the “Subscription
Receipt Offering”), and (ii) Common Shares at a price per $0.65 per Common Share (the “Common Share
Offering”), for aggregate gross proceeds of up to $10,000,250, as further described in the Company's news
release dated September 8, 2022.
Under the First Tranche, the Company iss ued 9,504,647 Subscription Receipts at a price of $0.65 per
Subscription Receipt for aggregate gross proceeds of $6,178,020.55. Each Subscription Receipt has, upon
satisfaction of certain escrow release conditions, including the closing of the Acquisition, and without the
payment of any additional consideration, automatically converted into one Common Share. The Company
expects the Common Share Offering to close in early April, 2023.
Trading Halt
The Common Shares continue to be halted from trading, and the Common Shares are expected to resume
trading following the closing of the Common Share Offering, or as otherwise determined by the TSXV.
About Sierra Madre
Sierra Madre Gold & Silver (TSX.V: SM) is a preci ous metals development and exploration company,
focused on the restart of the La Guitarra Mine in the Temascaltepec mining district, Mexico, and the
exploration and development of its Tepic and La Tigra properties in Nayarit, Mexico. The La Guitarra Mine
is a permitted, past -producing underground mine which includes a 500 t/d processing facility that
operated until mid-2018.
The +2,600 ha Tepic project hosts low -sulphidation epithermal gold and silver mineralization with an
existing historic resource. La Tigra, located 148 km north of Tepic, has been mined historically; Sierra
Madre’s maiden 2022 drill program at the site intercepted shallow mineralization.
Sierra Madre’s management has played key roles for managing exploration and development of more than
22Moz gold and 600Moz silver in combined reserves and resources. Sierra Madre’s team of professionals
has collectively raised over $1B for mining companies.
On behalf of the board of directors of Sierra Madre Gold and Silver Ltd.,
“Alexander Langer”
Alexander Langer
President, Chief Executive Officer and Director
Contact:
Cautionary Note
Neither the TSX Venture Exchange n or 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 news
release.
This press release contains "forward -looking information" and "forward -looking statements" within the
meaning of applicable securities legislation. The forward -looking statements herein are made as of the
date of this press release only, and the Company does not assume any obligation to update or revise them
to reflect new information, estimates or opinions, future events or results or otherwise, except as required
by applicable law. Often, but not always, forward-looking statements can be identified by the use of words
such as "plans", "expects", "is expected", "budgets", "scheduled", "estimates", "forecasts", "predicts",
"projects", "intends", "targets", "aims", "anticipates" or "believes" or variations (including negative
variations) of such words and phrases or may be identified by statements to the effect that certain actions
"may", "could", "should", "would", "might" or "will" be taken, occur or be achieved. Forward -looking
information in this press release includes, but is not limited to, the Company’s expectations regarding the
resumption of trading of the Common Shares on the TSXV and the closing of the Common Share Offering
and the Private Placement.
In making the forward-looking statements included in this news release, the Company has applied several
material assumptions, including that the Company will be able to receive all required regulatory approvals
for the resumption of trading of the Common Shares on the TSXV by the timelines currently anticipated (or
at all) and that the Company will be abl e to complete the Private Placement on the terms of the Agency
Agreement. Forward-looking statements and information are subject to various known and unknown risks
and uncertainties, many of which are beyond the ability of the Company to control or predict , that may
cause the Company’s actual results, performance or achievements to be materially different from those
expressed or implied thereby, and are developed based on assumptions about such risks, uncertainties and
other factors set out herein, including, but not limited to, the risk that the Company is not able to complete
Private Placement on the terms set out in the Agency Agreement (or at all) and the risk that the Company
is unable to obtain requisite regulatory approvals for the resumption of trading of the Common Shares on
the TSXV as currently anticipated.
Such forward -looking information represents management's best judgment based on information
currently available. No forward-looking statement can be guaranteed and actual future results may vary
materially. Accordingly, readers are advised not to place undue reliance on forward-looking statements or
information.