MONTREAL, QUÉBEC – Cyprium Mining Corporation ("Cyprium" or the "Company") (TSX VENTURE:CUG)(TSX VENTURE:CUG.DB) is pleased to announce that it intends to complete a non-brokered private placement of common shares (the "Common Shares") of the Company in an amount up to $500,000 at a price of $0.11 per Common Share (the "Offering").
Alain Lambert, Chairman and CEO of Cyprium stated: "Following our announcement on the proposed joint venture for the exploitation and exploration of the Potosi silver mine located in the historic silver rich mining district of Santa Eulalia in Mexico, we were approached by investors wanting to participate in our future growth by way of equity. We had originally planned to finance this transaction solely from the proceeds of the previously announced non-dilutive placement of bonds of Cyprium in the aggregate amount of US$4,500,000. We view the investors' interest, especially in today's market environment, as a strong show of confidence for the Company and we have decided to proceed with this equity financing."
Cyprium anticipates that the second tranche of the bond financing for an amount of US$2 million will close by the end of October 2015. The bonds will bear interest at a rate of 12.5% per annum, calculated and payable quarterly in arrears.
In addition to the rights of exploitation and exploration of the Potosi silver mine, the proposed joint venture will also have the exclusive rights of possession, usage and operations to the San Guillermo processing facility which is located seven kilometers from the Potosi silver mine, as well as all of the exploration and exploitation rights to a property adjacent to the Potosi silver mine known as La Chinche. Cyprium will initially acquire a 53% interest in the Joint Venture in return for a US$2.5 million financial commitment to the joint venture to be completed by December 31, 2016.
An arms' length third party holds certain rights with respect to the Potosi silver mine and San Guillermo plant, including the rights to mine at the Potosi silver mine and the rights of possession, usage and temporary operation of the San Guillermo facilities (the "Rights"). Concurrently with the entering into of the joint venture, the joint venture company will purchase the Rights from the third party (the "Rights Acquisition"). The total purchase price for the Rights to be paid by the joint venture company will be US$746,846 (the "Purchase Price"). The Purchase Price shall be paid as to US$400,000 in cash at closing (the "Closing Amount"), and US$346,846 to be paid in monthly installments starting eight months after closing.
The proceeds of the Offering along with the proceeds from the second tranche of the bond financing will be primarily used to pay the Closing Amount, finance the rehabilitation of certain infrastructure of the Potosi mine, the Company's exploration program and initial production at the Potosi mine and general working capital. Cyprium anticipates to close the Offering and the Rights Acquisition as well as to finalize the proposed Potosi joint venture by the end of October 2015.
The Offering is subject to the approval of the TSX Venture Exchange. Pursuant to applicable securities laws, all securities issued pursuant to the Offering will be subject to a hold period of four months plus one day following the closing of the Offering.
As part of the Offering certain directors and officers of the Company (the "Insiders") together with other arm's length shareholders of the Company have arranged for the sale of up to 4,500,000 Common Shares of their personal holdings at a price of $0.11 per Common Share through the facilities of the TSX Venture Exchange (the "Swap"). The proceeds from the Swap will be used to facilitate such Insiders or shareholders subscription for their participation in the Offering.
Cyprium may engage finders or agents to act as agents of Cyprium in connection with the Offering and the Swap, and in connection therewith may pay finders and agents a cash commission of up to 8% of the proceeds of the Offering and the Swap that result from such parties efforts, subject to compliance with applicable securities laws. The finders and agents may also be granted warrants to purchase up to 8% of the number of Common Shares sold under the Offering and the Swap, with each warrant entitling the holder to purchase one Common Share at a price of $0.11 per Common Share for a period of two years from the closing of the Offering.
The Company wishes to update its previously disclosed conversion of certain secured and unsecured debt into either Common Shares of the Company or convertible debentures of the Company. The Company announces that certain arm's length secured debt holder have agreed to convert $40,000 of debt into 363,636 Common Shares based on a conversion price of $0.11 per Common Share and arm's length holders of $50,000 of secured debt have agreed to convert such debt into convertible unsecured debentures of the Company (the "Convertible Debentures"). The Convertible Debentures will mature three (3) years from the date of issuance, will bear interest at a rate of 8% per annum payable quarterly in cash. The principal amount of the Convertible Debentures shall be convertible at any time at the option of the holder into Common Shares of the Company at a price of $0.15 per Common Share, and upon giving effect to such conversion, all accrued and unpaid interest will be paid in full within 60 days.
Mr. Lambert, Chairman & CEO stated: "We were recently approached by some arm's length debt holders who wished to convert their debt investments in our Company in a way that would give them equity exposure in Cyprium. We consider this conversion of secured debt into equity to be further support of the Company's business plan. Personally I will be converting $48,000 of unpaid Chairman & CEO fees into 436,364 Common Shares at an issue price of $0.11 and US$21,000 of unsecured debt into Convertible Debentures as I aim to increase my share ownership in Cyprium."
The issuance of the Common Shares and the Convertible Debentures is subject to the approval of the TSX Venture Exchange and all Common Shares issued in connection with the debt conversions or the conversion of the Convertible Debentures will be subject to a four month and one day hold period, in accordance with the applicable securities laws.
The Company announces that Mr. Carlos Arzola, a director of Cyprium, has requested the Company to pay outstanding director's fees in the amount of $10,500 through the issuance of 95,454 common shares of the Company (the "Arzola Shares") at an issue price of $0.11 per common share.
The issuance of the Arzola Shares and the 436,364 Common Shares to Mr. Lambert as noted above is subject to the approval of the TSX Venture Exchange and all Common Shares issued pursuant to the Shares for Services will be subject to a four-month and one day hold period, in accordance with the applicable securities laws.
For more information on the aforementioned transactions please refer to the July 28th, 2015 news release of Cyprium available at www.sedar.com. All dollar amounts herein are in Canadian dollars, unless otherwise indicated. Cyprium announces the resignation of Mr. Jean Halde as a director of the Company effective immediately. Mr. Halde was a director of the Company since its inception in 2012. The board would like to thank Mr. Halde for his valuable contribution to the Company. Cyprium is currently evaluating potential candidates to serve as directors. The Company is seeking members who have direct expertise into mine operations and exploration.
About Cyprium Mining Corporation
Cyprium Mining acquires, operates and develops past producing mines located in Mexico. When selecting projects, Cyprium has as key criteria the possibility of the mine being brought back into production in the short-term and the mine having significant exploration potential. Cyprium utilizes traditional, proven small-scale production techniques in the short-term to generate cash flow. This cash flow will in great part fund the systematic development and exploration of the mine through modern equipment and techniques. Cyprium is committed to maximizing the potential of these projects by funding exploration programs mainly through cash flows generated by production instead of funding such programs strictly through equity offering thus limiting shareholder dilution. Cyprium prioritizes projects which are easily accessible and close to large urban centers.
Cyprium also has the exclusive use of a 100 metric tons per day flotation plant located twenty kilometers outside the City of Chihuahua in Northern Mexico (the "Aldama Plant"). Cyprium has the exclusive use of the Aldama Plant under a five year agreement with its owner during which Cyprium will use the Aldama Plant on a variable cost basis. Cyprium will purchase mill feed for its own account and will be responsible for the supervision of all metallurgic processes, including quantitative chemical analysis, assaying of samples, determining feed grades and the sale of concentrates (see October 1st, 2014 news release). Cyprium recently announced its plans to double the capacity of the Aldama plant before the end of 2015.
Cyprium also owns 51% of Coyame Copper SA de CV ("Coyame Copper"), a Chihuahua, Mexico based mining exploration company and has an option to increase its stake in Coyame Copper to 70% for a consideration of US$1.2 million payable over a period of eighteen months following the exercise of the option. Coyame Copper's Las Cristinas Project consist of four adjacent exploration concessions (Las Cristinas, La Parrita, La Verde and La Lagrimosa) covering 684 hectares.
For further information, please contact:
Cyprium Mining Corporation
Alain Lambert
Chairman and C.E.O.
[email protected]
Cyprium Mining Corporation
Ron Keenan
C.O.O.
+ 1 514 915 3836
[email protected]
www.cypriummining.com
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
The securities of Cyprium being offered have not been, nor will 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 U.S. registration requirements. This release does not constitute an offer for sale of securities in the United States.
This news release contains "forward-looking information" (within the meaning of applicable Canadian securities laws) and "forward -looking statements" (within the meaning of the U.S. Private Securities Litigation Reform Act of 1995). Such statements or information are identified with words such as "anticipate", "believe", "expect", "plan", "intend", "potential", "estimate", "propose", "project", "outlook", "foresee" or similar words suggesting future outcomes or statements regarding an outlook. Such statements include, among others, those concerning the Company's anticipated plans for developments of the Company and its mining projects.
Such forward-looking information or statements are based on a number of risks, uncertainties and assumptions, including without limitation, statements pertaining to the Offering and the Swap, including Cyprium's ability to obtain necessary approvals from the TSX Venture Exchange, which may cause actual results or other expectations to differ materially from those anticipated and which may prove to be incorrect. Assumptions have been made regarding, among other things, management's expectations regarding future growth, plans for and completion of projects by Company's third party relationships, availability of capital, and the necessity to incur capital and other expenditures. Actual results could differ materially due to a number of factors, including, without limitation, operational risks in the completion of Company's anticipated projects, delays or changes in plans with respect to the development of Company's anticipated projects by Company's third party relationships, risks affecting the ability to develop projects, risks inherent in operating in foreign jurisdictions, the ability to attract key personnel, and the inability to raise additional capital. No assurances can be given that the efforts by the Company will be successful. Additional assumptions and risks are set out in detail in the Company's MD&A, available on SEDAR at www.sedar.com.
Although the Company believes that the expectations reflected in the forward-looking information or statements are reasonable, prospective investors in the Company's securities should not place undue reliance on forward-looking statements because the Company can provide no assurance that such expectations will prove to be correct. Forward-looking information and statements contained in this news release are as of the date of this news release and the Company assumes no obligation to update or revise this forward-looking information and statements except as required by law. Investors should note that the Las Cristinas, Potosi and La Chinche properties have no established mineral resources or mineral reserves as defined by NI 43-101. Although Cyprium Mining may make a production decision based on historical production records, sampling or drilling results, a feasibility study has not been completed on any of these projects and there is no certainty that the proposed operations will be economically or technically viable.
Original Article: http://www.cypriummining.com/en/investors/news-releases/cyprium-mining-announces-private-placement–update-on-proposed-potosi-joint-venture
