Santacruz Silver Mining Ltd. (TSX-V:SCZ)  is pleased to announce that further to its news release dated April 4, 2024, it is has entered into a definitive omnibus agreement and an amended and restated omnibus security agreement, each with an effective date of October 3, 2024, with certain Glencore entities to amend certain transaction documents in connection with the prior sale by Glencore of its Bolivian mining assets to Santacruz, as previously announced by Santacruz on March 21, 2022 and October 13, 2021. The Definitive Agreements are the result of arm’s length negotiations between Santacruz and Glencore and supersede the binding term sheet entered into between the parties dated March 28, 2024.

Arturo Prestamo, Executive Chairman and CEO, commented; “This agreement marks a significant milestone for Santacruz, providing us with enhanced financial flexibility as we move forward with our strategic plans. The revised payment structure allows us to better manage our cash flow while maintaining the ability to accelerate payments if it becomes beneficial to do so. We are also pleased to maintain our strong partnership with Glencore, whose collaboration has been invaluable in reaching these mutually beneficial terms. We look forward to continuing this productive relationship as we execute on our vision for the future.”

Pursuant to the Definitive Agreements, Santacruz and Glencore have agreed to the following terms:

• The total consideration payable by Santacruz to Glencore under the Definitive Agreements will be in lieu of all present and future amounts owing or payable by Santacruz under the transaction documents entered into pursuant to the Transaction.
• Subject to the Acceleration Option (as defined below), Santacruz will pay up to US$80 million in cash to Glencore in eight equal annual instalments of US$10 million each  with the first payment being made on or before November 1, 2025.
• Santacruz can exercise an option to accelerate the payment of the outstanding balance of the Base Purchase Price in full at any time, such prepayment amount will be US$40 million if exercised prior to November 1, 2025 and shall decrease by US$2 million for each annual instalment of US$10 million that has been paid by Santacruz.
• Santacruz grants to Glencore a contingent value right whereby Santacruz will pay Glencore a monthly payment of US$1,333,333.33, subject to a total cap of US$77.7 million, in the event that in any calendar month during the period commencing on March 28, 2024 and ending on December 31, 2032, the average LME spot price of zinc (or the highest open hedge price if the Hedging Option (as defined below) has been exercised or the price at which a hedge would have been entered into if Santacruz exercises the Santacruz Option (as defined below)) in the calendar month is at least US$3,850 per tonne. The CVR Payment will increase by US$83,333.33 for each increase of $100 per tonne above the Base Price and up to a price of $5,049.99 per tonne.
• In addition to the CVR Payment, in the event the average LME spot price of zinc (or the highest open hedge price if the Hedging Option has been exercised or the price at which a hedge would have been entered into if Santacruz exercises the Santacruz Option) in a calendar month is at least US$5,050 per tonne, Glencore will be entitled to an additional monthly payment of US$166,666.66 for each increase of $100 per tonne above the Additional Payment Price, with 50% of such payment being treated as a CVR Payment counting towards the CVR Cap and the remaining 50% of such payment not being treated as a CVR Payment and therefore will not count towards the CVR Cap.
• Glencore can require Santacruz to hedge a limited amount of zinc production from its Bolivian mining operations (so long as the hedging price would exceed the Base Price) subject to certain conditions. If Santacruz determines, acting reasonably and in good faith, that the cost of entering into either a hedging arrangement is not commercially reasonable based on current market conditions, Santacruz may, in lieu of entering into a hedging arrangement, pay the CVR Payments and, if applicable, the Additional Payments to Glencore over the period which the hedge would have covered, based on the price at which a hedging arrangement would have been entered into pursuant to the Glencore notice exercising the Hedging Option.
• The Additional Payments will terminate once Santacruz is no longer obligated to make CVR Payments.
• The payment obligations of Santacruz under the Omnibus Agreement are secured against the Bolivian mining assets of Santacruz pursuant to the Omnibus Security Agreement.

The Definitive Agreements and the transactions contemplated thereby are subject to final acceptance of the TSX Venture Exchange.

About Santacruz Silver Mining Ltd.

Santacruz is engaged in the operation, acquisition, exploration, and development of mineral properties in Latin America. The Bolivian operations are comprised of the Bolivar, Porco and the Caballo Blanco Group, which consists of the Tres Amigos, Reserva and Colquechaquita mines.  The Soracaya exploration project and San Lucas feed sourcing business are also in Bolivia.  The Zimapan mine is located in Mexico.