Telson Closes Purchase of Nyrstar Variable Purchase Price Royalty at Campo Morado & Accelerates Construction at Tahuehueto
Campo Morado Royalty Purchase
Vancouver, British Columbia--(Newsfile Corp. - April 26, 2021) - Telson Mining Corporation (TSXV: TSN) (OTC Pink: SOHFF) (FSE: TSGN) ("Telson" or the "Company") is pleased to announce that the Company has closed the purchase of the Nyrstar Campo Morado Variable Purchase Price Royalty (the "VPP Royalty). Details of the transaction were previously announced on February 23, 2021. Telson has issued 14,600,000 shares at the negotiated price of C$0.345 per share, which was roughly a 64% premium to Telson's trading price as of Feb 22, 2021, the date the parties executed the VPP Royalty acquisition letter agreement.
Telson is also pleased to inform shareholders that last week construction work was accelerated at the Tahuehueto gold mine construction project where Telson is building a 1,000 tpd mining operation. Additional construction crews have arrived at the site and have re-commenced assembly work of the mineral processing facility and are preparing for the start of work on other major infrastructure initiatives such as the tailings storage facility, water pumping station and the water line which will supply the necessary water to sustain continuous milling and mining operations.
Tahuehueto capital expenditure ("CAPEX") investment required to complete mine construction and commissioning of the project is estimated at US$15.4 million. This includes US$12.6 million for equipment and construction including a 15% contingency, plus US$2.8 million of working capital to support the operations until the mine has achieved positive cash flow.
To date Telson, on March 30, 2021, closed a C$10,080,000 private placement and last week, on April 16, 2021 executed the Empress Silver Stream agreement that will provide an additional US $5 million in two tranches of capital to Tahuehueto construction. The final US $12 million Accendo Banco loan facility is in the late stages of documentation and expected to close in the coming weeks along with the restructuring of Telson outstanding loans with Trafigura and Nyrstar.
"The closing of the VPP Royalty is a major positive step for Telson and the Campo Morado Mine and will increase revenue at Campo Morado on an ongoing basis. To put this into context, at average March 2021 realized zinc sale prices, purchasing the VPP Royalty, that would have been at its highest variable rate of 4.25% on the production of zinc, Telson has realized additional revenue of over US$450,000 for March 2021 production." states Ralph Shearing, Telson's President and CEO. "This along with accelerating our Tahuehueto construction should be welcome news to our shareholders and investors."
About Telson Mining Corporation
Telson Mining Corporation is a Canadian based mining company with two 100% owned Mexican gold, silver, and base metal mining projects.
Telson's Tahuehueto mining project is in north-western Durango State, Mexico where construction has been advanced to an estimated 60% of completion. Upon closing of the recently announced US$25 million funding package, Telson will have funding available to finish construction of its 1,000 tonne per day processing facility and related mine infrastructure to initiate production of gold, silver, lead, and zinc in concentrates at Tahuehueto. The Company is targeting initial production by end of 2021 and ramping up to full production capacity during Q1 2022.
Campo Morado is an operating polymetallic base metal mine with mining and milling equipment currently producing at an average of 2,150 tonnes per day and is currently estimated to be Mexico's 6th largest zinc producer.
On Behalf of the Board of Directors
(signed) "Ralph Shearing"
Ralph Shearing, P. Geol, President and Director
Cautionary Note Regarding Production Decisions and Forward-Looking Statements
It should be noted that Telson declared commercial production at Campo Morado prior to completing a feasibility study of mineral reserves demonstrating economic and technical viability. Accordingly, readers should be cautioned that Telson's production decision has been made without a comprehensive feasibility study of established reserves such that there is greater risk and uncertainty as to future economic results from the Campo Morado mine and a higher technical risk of failure than would be the case if a feasibility study were completed and relied upon to make a production decision. Telson has completed a preliminary economic assessment ("PEA") mining study on the Campo Morado mine that provides a conceptual life of mine plan and a preliminary economic analysis based on the previously identified mineral resources (see News Release dated November 8, 2017 and April 4,2018).
Statements contained in this news release that are not historical facts are "forward-looking information" or "forward-looking statements" (collectively, "Forward-Looking Information") within the meaning of applicable Canadian securities laws. Forward Looking Information includes, but is not limited to, disclosure regarding the planned recommencement of mining operations at Campo Morado; and other possible events, conditions or financial performance that are based on assumptions about future economic conditions and courses of action; the timing and costs of future activities on the Company's properties, such as production rates and increases; success of exploration, development and bulk sample processing activities, and timing for processing at its own mineral processing facility on the Tahuehueto project site. In certain cases, Forward-Looking Information can be identified using words and phrases such as "plans," "expects," "scheduled," "estimates," "forecasts," "intends," "anticipates" or variations of such words and phrases. In preparing the Forward-Looking Information in this news release, the Company has applied several material assumptions, including, but not limited to, that the current exploration, development, environmental and other objectives concerning the Campo Morado Mine and the Tahuehueto Project can be achieved; that recommencement of operations at Campo Morado will proceed as planned; the continuity of the price of gold and other metals, economic and political conditions, and operations. Forward-Looking Information involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance, or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the Forward-Looking Information. There can be no assurance that Forward-Looking Information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on Forward-Looking Information. Except as required by law, the Company does not assume any obligation to release publicly any revisions to Forward-Looking Information contained in this news release to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
Neither 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.
For further information about Telson Mining Corporation, please contact:
Corporate Communications Manager
Tel: +1 (604) 684-8071
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/81695