Metals Update 08/06/2021

Santacruz to issue 10.34M shares for debt of $4.46M

Santacruz Silver Mining Ltd. intends to issue an aggregate of 10,342,604 common shares of the company at a price of 43.2 cents per share in settlement of outstanding debts totalling $4,468,005.

Pursuant to the terms of a debt settlement agreement dated as of the date hereof, the company has agreed to issue 9,907,530 common shares of the company in settlement of outstanding debts totalling $4,280,053 ($3,545,438 (U.S.)) owing to Empresa Minera Manquiri SA. The Manquiri debt was accrued pursuant to a loan agreement dated March 6, 2018, among Impulsora Minera Santacruz SA de CV, a wholly owned subsidiary of the company, the company, as guarantor, and Manquiri, as amended by a first amendment agreement dated July 2, 2018, as amended by a second amendment agreement dated Oct. 2, 2018, and further amended by a third amendment agreement dated Jan. 30, 2020. Pursuant to the loan agreement, Manquiri advanced to the borrower the sum of $2.3-million (U.S.) that accrued interest at the rate of 9 per cent per annum, which was subsequently amended to 12 per cent per annum. The Manquiri loan had a maturity date of March 31, 2021; however, pursuant to a debt acknowledgment and obligation of payment agreement dated April 21, 2021, the parties agreed to settle the Manquiri debt by July 21, 2021.

Pursuant to a debt NSR settlement agreement dated as of the date hereof, the company has also agreed to issue 435,074 common shares of the company in settlement of outstanding debts totalling $187,952 ($156,000 (U.S.)) owing to Minas Guilloyna SA de CV. The Guilloyna debt was accrued pursuant to a net smelter return agreement dated Sept. 19, 2014, among the borrower, the company, as guarantor, and Guilloyna, that was entered into in connection with the company’s acquisition of the Rosario mine from Guilloyna. Pursuant to the NSR agreement, the borrower agreed to pay a net smelter return royalty for up to 1.0 per cent on precious metals produced from the Rosario mine. On Dec. 31, 2016, the net smelter return royalty in the amount of $156,000 (U.S.) became due and owing to Guilloyna.

By issuing the settlement shares, the Manquiri debt and Guilloyna debt will be definitively extinguished. The company is proposing to issue the settlement shares to preserve cash to finance future operations.

The debt settlements are subject to all necessary regulatory approvals, including acceptance from the TSX Venture Exchange. All securities issued in connection with the debt settlements will be subject to a four-month hold period from the closing date under applicable Canadian securities laws, in addition to such other restrictions as may apply under applicable securities laws of jurisdictions outside Canada.

Tocvan signs agreement to acquire El Picacho option

Tocvan Ventures Corp. has signed a letter of commitment with Millrock Resources Inc. to acquire the option agreement for the El Picacho gold project within the Caborca orogenic gold belt in Sonora, Mexico. The project is located 140 kilometres north of Hermosillo in Sonora, Mexico, and is fully accessible by road. Extensive surface exploration has been conducted historically defining five gold targets on the project. Tocvan believes these targets will be ready for drill testing with surface confirmation via trenching. A permit is currently active to allow for trenching and drilling on the project. A site visit has been completed by Tocvan to confirm target areas and project accessibility. The agreement is subject to an additional 60-day due diligence period effective June 7, 2021.

About El Picacho

Location and infrastructure

  • Total area: 2,413.7 hectares;
  • Road accessible, 140 km north-northwest of Hermosillo;
  • Excellent road access. Railway on eastern edge of project;
  • 18 km southwest of San Francisco mine (over three million ounces gold at 0.52 gram per tonne Au in two open pits).

Historic work summary

  • Five orogenic gold targets defined: San Ramon, Tortuga, El Puerto, La Cornea and El Jabali;
  • 2,650 rock samples collected (32 samples of over 10 g/t Au, 189 samples of over one g/t Au);
  • Regional-scale mapping completed;
  • 3,548 soil samples collected, covering project area (up to 4.75 g/t Au in soil);
  • 70 per cent of area covered by ground magnetic survey;
  • 17.8 line km of IP (induced polarization) surveys;
  • Limited drilling completed, widely spaced;
  • Fully permitted for drilling and trenching.

“We are extremely excited to announce the agreement to acquire the El Picacho gold project,” commented chief executive officer Derek Wood. “Tocvan sees this as a tremendous opportunity to add to our portfolio of strong gold assets and El Picacho will be the perfect complement to Pilar. The amount of quality exploration work completed to date on the project provides Tocvan with several gold targets that can be advanced to drill-ready status quickly. We look forward to advancing El Picacho while we continue to unlock the potential of Pilar.”

Terms of option agreement

Total cash payments of $1,989,600 (U.S.) will be made over a five-year term to acquire 100-per-cent interest in the project. Millrock is to retain a 2-per-cent net smelter royalty with an option for Tocvan to purchase back 1 per cent for $1-million (U.S.). Upon full execution of the option agreement an annual advance minimum royalty (AAMR) of $25,000 (U.S.) will be paid to Millrock, doubling each year until the start of production. An initial payment of $78,000 (U.S.) is due upon signing of the agreement.

Brodie A. Sutherland, PGeo, vice-president of exploration for Tocvan Ventures and a qualified person (QP) as defined by Canadian National Instrument 43-101, has reviewed and approved the technical information contained in this release.

Bonterra drills eight metres of 4.4 g/t Au at Barry

Bonterra Resources Inc. has released results from the continuing drilling campaign at the Barry project. Recent drilling continues to expand the Barry “H-Series” gold mineralized zones at depth. Specifically, the Barry H15 Zone gold mineralized outline has quadrupled in size since the last National Instrument 43-101 (“NI 43-101”) report was filed in 2019 and remains open along strike and at depth (see Figure 4). The latest drilling results encompass 25 expansion diamond drill holes [12,989 metres (“m”)], including seven drill holes that were deepened to test for potential extensions of “H-Series” subparallel zones. Drilling highlights include a wide zone of mineralization in drill hole MB-21-346 that intercepted 4.4 grams-per-tonne gold (“g/t Au”) over 8.0 m (see Figures 1 to 4).

The Company is currently drilling at a rate of approximately 10,000 m per month and plans to announce a mineral resource estimate update on its three main deposits, Gladiator, Barry, and Moroy in the coming weeks (the “2021 Resource Update”), which is expected to incorporate approximately 130,000 m of new drilling information, including the results presented today. In addition, work on the the Preliminary Economic Assessment (“PEA”) is ongoing and is expected to be completed in Q4 2021 (see press release dated March 1, 2021).

Drilling Highlights*:

  • 4.4 g/t Au over 8.0 m in hole MB-21-346
  • 9.0 g/t Au over 3.6 m and 5.5 g/t Au over 2.1 m in hole MB-21-345
  • 11.4 g/t Au over 1.8 m in hole MB-21-343
  • 5.4 g/t Au over 5.0 m in hole MB-21-341
  • 5.6 g/t Au over 4.0 m in hole MB-21-349

* True widths are estimated to be greater than 65% of the drill intersection length.

Pascal Hamelin, CEO, commented: “It is very encouraging to continue seeing drill results that demonstrate good continuity across thick widths in these “H-Series” gold mineralized zones. I really look forward to seeing how these results are incorporated into the upcoming mineral resource estimate update. Importantly, company-wide engineering and permitting continues to progress which should allow for a smooth and rapid transition for Bonterra from exploration to development over the next 18-24 months.”

The Company has drilled 86 holes and deepened eight existing holes representing a total of 38,958 m at Barry since July 23, 2020. Complete and partial results from 21 drill holes have been received including seven of the eight deepened holes since the press release dated March 31, 2021. Some results from the remaining holes are still pending (See Table 1 and Figure 1).

The Barry drilling program targeted the expansion and continuity of the gold mineralized zones in key areas around the NI 43-101 Barry mineral resource estimate in 2019. Drilling results continue to confirm the expansion of multiple “H-Series” subparallel zones which remain open at depth across the Barry deposit, in addition to outlining further potential to the east of the deposit (See Table 1 and Figures 1 to 4).

The Barry gold deposit is characterized as multiple sub-parallel, sub-vertical, shear zones and a second set of subparallel “H-Series” veins dipping 30 to 60 degrees to the south hosted within intermediate to mafic volcanics and tuffs with local felsic intrusions. Gold mineralization consists of disseminated sulfides within the shear zones and the veins with local visible gold. The Barry deposit has been delineated over 1.4 kilometres along strike and 600 m vertical and remains open for expansion.