Zacatecas Closes Oversubscribed $19.15 Million Financing
ZACATECAS CLOSES OVERSUBSCRIBED $19.15
MILLION FINANCING
VANCOUVER, BC
,
March 22, 2022
/CNW/ - Zacatecas Silver Corp. ("Zacatecas" or the "Company" (TSXV: ZAC)
(OTC Markets: ZCTSF) (
Frankfurt
: 7TV) is pleased to announce the closing of a
$19.15 million
offering of
subscription receipts (the "Financing").
The Financing was previously announced on
February 28, 2022
as a
$15 million
private placement and then, due to
strong demand, was upsized to
$18 million
on
March 4, 2022
. Today, the Financing has closed, on an oversubscribed
basis, for total gross proceeds of
$19,151,521
pursuant to the issuance of 17,410,474 subscription receipts (each a
"Subscription Receipt") at
$1.10
per Subscription Receipt.
Zacatecas CEO Bryan Slusarchuk states,
"We appreciate the strong support from the syndicate of agents on this
transaction and the buy side participants, which include outstanding institutional and individual specialist investors
in the metals space. We look forward to moving the advanced stage and high-grade Esperanza Gold Project
towards production while also continuing our ongoing drill program at the Zacatecas Silver Project, where we are
currently drilling to follow up on the recent high grade silver discovery at Panuco North."
The proceeds raised from the Financing will be used to satisfy the
USD$5,000,000
cash consideration in connection
with the acquisition of the Esperanza Gold Project from Alamos Gold Inc., begin advancing the Esperanza Gold
Project towards production, fund the ongoing drill program at the Company's existing silver project and for general
working capital purposes.
Each Subscription Receipt is convertible into one unit of the Company (each a "Unit") upon the completion of certain
escrow release conditions as described below. Each Unit will consist of one common share of the Company (a
"Common Share") and one-half of one Common Share purchase warrant (each whole Common Share purchase
warrant a "Warrant"). Each Warrant will entitle the holder thereof to purchase one Common Share at a price of
$1.50
per Common Share for a period of 24 months from the date of issue.
The proceeds of the Financing will be released from escrow, upon notice given to the Escrow Agent on or prior to
5:00pm
(
Toronto
time) on
May 21, 2022
upon (a) the completion, satisfaction or waiver, as the case may be, of all
the conditions precedent to the acquisition of the Esperanza Gold Project by the Company from a subsidiary of
Alamos Gold Inc. (the "Proposed Transaction") set forth in the share purchase agreement between such parties
dated
February 28, 2022
; and (b) the receipt of all required corporate, shareholder and regulatory approvals in
connection with the Proposed Transaction ((a) and (b) together, the " Escrow Release Conditions ").
Clarus Securities Inc. acted as Lead Agent on behalf of a syndicate of agents that included Eventus Capital Corp.,
Haywood Securities Inc. and Canaccord Genuity Corp. Zacatecas will pay the syndicate of agents a cash
commission of
$998,716
(half of which was paid today and half of which will be paid upon the release of proceeds
from the Financing to the Company from escrow) and issued a total of 907,924 compensation options (the
"Compensation Options"), with each Compensation Option exercisable into a Common Share at a price of
$1.10
for a
period of 24 months from the date of issue.
The securities issued under the Offering will be subject to restrictions on resale expiring on
July 23, 2022
.
The securities referred to in this news release have not been, nor will they be, registered under the United States
Securities Act of 1933, as amended, and may not be offered or sold within
the United States
or to, or for the account
or benefit of, U.S. persons absent U.S. registration or an applicable exemption from the U.S. registration
requirements. This release does not constitute an offer for sale of, nor a solicitation for offers to buy, any securities in
the United States
.
Qualified person
The contents of this news release have been reviewed and approved by Dr. Wilson, BSc (honours), PhD, FAusIMM
(CP), FSEG, chief operating officer of
Zacatecas
. Dr. Wilson is a qualified person as defined by National Instrument
43-101 and is responsible for all technical information in this news release.
About the Esperanza Gold Project
Esperanza
is an advanced stage, attractive low-cost, low-capital-intensity and low-technical-risk growth project
located in
Morelos
state,
Mexico
.
Alamos
has progressed the project through advanced engineering, including
metallurgical work, while also focusing on stakeholder engagement, including building community relations.
To date, significant core and reverse circulation drilling has occurred at the
Esperanza
gold project, resulting in a total
of 389 drill holes for 69,716 metres. Four targets adjacent to or close to the historical resource were identified to
expand the historical resource. The project also hosts seven regional exploration targets, largely untested, that also
merit drill testing.
Alamos
reported in its most recent annual information form a resource estimate of a measured and indicated
resource of 34,352,000 tonnes at 0.98 g/t gold and 8.09 g/t silver for 1,083,366 ounces of gold and 8,936,201
ounces of silver and inferred resource of 718,000 tonnes at 0.80 g/t gold and 15.04 g/t silver for 18,375 ounces of
gold and 347,192 ounces of silver. The Company considers this to be an historical resource for the purposes of
National Instrument 43-101. Resource blocks were defined using with dimensions of 10 metres (m) by
10 m
by
five
m
. The estimation of grades was performed with the ordinary kriging method on capped composites. An added step
in the estimation strategy was the utilization of the dynamic anisotropy technique in
Vulcan's
unfolding options. This
added capability allows for a more realistic outcome of the estimated grade's spatial distribution as it follows the
folded shape of the deposit. Assumptions used in the resource include the following metal prices: gold price of
$1,400
(U.S.) per ounce (oz) and silver price of
$22
(U.S.) per oz. The resource assumed the following economic
assumptions: recovery of 60.4 per cent at 0.2 g/t to 71.9 per cent at 1.6 g/t for gold, 25 per cent for silver,
$2.60
-
per-tonne mining costs,
64-cents
-per-tonne general and administrative costs,
$4.20
-per-tonne milling costs and a pit
slope of 45 degrees. The Company considers the resource relevant due to its identification and modelling of the
Esperanza
deposit.
The Company has not done sufficient work to classify the resource as a current mineral resource or mineral reserves
and the Company is not treating the historical estimate as current mineral resources or mineral reserves. Although the
resource estimate is considered reliable, the Company will resample a portion of the drill core for the purpose of
carrying out a new resource estimate. Furthermore, additional data verification, including resurveying of select
diamond drill holes collars; review of graphic drill core logs, comparison of these logs with remaining half-cut core and
a cross check of select geological logs agonist database entries; and a check of original assay certificates against
the assays and drill hole database.
About Zacatecas Silver Corp.
The
Zacatecas
silver property is located in
Zacatecas
state,
Mexico
, within the highly prospective
Fresnillo
silver belt,
which has produced over 6.2 billion ounces of silver. The company holds 7,826 hectares (ha) (19,338 acres) of
ground that is highly prospective for low-sulphidation and intermediate-sulphidation silver base metal mineralization
and potentially low-sulphidation gold-dominant mineralization. On
Dec. 15, 2021
,
Zacatecas
announced a mineral
resource estimate at the
Panuco
deposit consisting of 2.7 million tonnes at 187 grams per tonne (g/t) silver equivalent
(AgEq) (171 g/t silver (Ag) and 0.17 g/t gold (Au)) for 16.4 million ounces AgEq (15 million ounces silver and 15,000
ounces gold).
The property is 25 kilometres (km) southeast of MAG Silver Corp.'s Juanicipio mine and Fresnillo PLC's
Fresnillo
mine. The property shares common boundaries with Pan American Silver Corp. claims and El Orito, which is owned
by Endeavour Silver. There are four main high-grade silver target areas within the
Zacatecas
concessions: the
Panuco
deposit, Muleros, El Cristo and San Manuel-San Gill. The property also includes
El Oro
, El Orito,
La Cantera
,
Monserrat,
El Penon
,
San Judas
and
San Juan
silver base metal vein targets. These targets are relatively unexplored
and will be the focus of rapid reconnaissance.
On behalf of the Company,
Bryan Slusarchuk
Chief Executive Officer and Director
Forward-Looking Statements
Information set forth in this news release contains forward-looking statements that are based on assumptions as of
the date of this news release. These statements reflect management's current estimates, beliefs, intentions and
expectations. They are not guarantees of future performance.
Zacatecas
cautions that all forward looking statements
are inherently uncertain and that actual performance may be affected by many material factors, many of which are
beyond their respective control. Such factors include, among other things: the closing of the Proposed Transaction,
risks and uncertainties relating to
Zacatecas's
limited operating history, its proposed exploration and development
activities on the Experanza Gold Project and its Zacatecas Properties and the need to comply with environmental and
governmental regulations. Accordingly, actual and future events, conditions and results may differ materially from the
estimates, beliefs, intentions and expectations expressed or implied in the forward-looking information. Except as
required under applicable securities legislation,
Zacatecas
does not undertake to publicly update or revise forward-
looking information.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of
the Exchange) accepts responsibility for the adequacy or accuracy of this release.
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SOURCE
Zacatecas Silver Corp.
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For further information:
Adam Ross, Investor Relations, Direct: (604) 229-9445, Toll Free: 1(833) 923-3334,
Email: [email protected]
CO: Zacatecas Silver Corp.
CNW 12:43e 22-MAR-22