Caldas Gold Corp. (TSX-V: CGC) announced today that it has signed a non-binding term sheet to receive total cash consideration of US$110 million pursuant to a Precious Metals Purchase Agreement to be entered into with Wheaton Precious Metals International Ltd. a wholly-owned subsidiary of Wheaton Precious Metals™ Corp. (TSX: WPM) (NYSE: WPM).  The proceeds from the Precious Metals Stream will solely be used to fund the expansion of the Company’s mining operations in the Deeps Zone at its Marmato Project located in the Department of Caldas, Colombia.

Serafino Iacono, Chairman and CEO of Caldas Gold, commented, “The streaming transaction is the first step in securing the project financing required to build Colombia’s next major gold mine. Given the due diligence undertaken by Wheaton, we believe the proposed streaming transaction validates the value we have identified in our Marmato Project. The streaming transaction will help us to manage the overall leverage in our capital structure while improving flexibility and reducing financing costs and risks. In light of our shared values around ESG, we are very pleased to have secured this competitively priced financing arrangement with a company the quality of Wheaton.”

“Wheaton is excited to partner with Caldas Gold in developing the Marmato Project. The strength and potential upside of this project was especially apparent during our onsite due diligence trip, prior to travel restrictions being put into place,” said Randy Smallwood, President and Chief Executive Officer of Wheaton. “We remain unwavering in our focus on delivering the highest quality portfolio of precious metals production to our shareholders through our top tier asset base, strong organic growth profile and acquisition of accretive growth opportunities such as Marmato.”

Upon entering into the Precious Metals Stream, WPMI will purchase 6.5% of the gold production and 100% of the silver production until 190,000 ounces of gold and 2.15 million ounces silver have been delivered, after which the stream drops to 3.25% of the gold production and 50% of the silver production for the life of mine. Under the proposed Precious Metals Stream, WPMI will pay total cash consideration of US$110 million, US$38 million of which is payable upon closing and the remaining portion of which is payable during the construction of the MDZ project at Marmato, subject to receipt of required permits and licenses, sufficient financing having been obtained to cover total expected capital expenditures, and other customary conditions. In addition, WPMI will make ongoing payments equal to 18% of the spot gold and silver price until the uncredited portion of the upfront payment is reduced to nil, and 22% of the spot gold and silver price thereafter.

Entering into the Precious Metals Stream remains subject to, among other matters, the negotiation and completion of definitive documentation, including the Precious Metals Purchase Agreement.

Caldas Gold is committed to supporting the communities in which it operates. As part of the Precious Metals Stream, Caldas Gold has undertaken to Wheaton that it will provide funding through its ESG initiatives to support the local communities around its Marmato Project.

Proposed US$150 Million Units Offering

Caldas Gold also announced today that it has determined to offer for sale, on a best efforts private placement basis, up to 150,000 units of the Company for anticipated aggregate gross proceeds of up to US$150 million. Each Unit is expected to consist of US$1,000 principal amount of senior secured gold-linked notes and a number of common share purchase warrants of the Company to be determined based on market conditions.  Concurrently, based on market conditions, Caldas Gold is considering an equity financing on a best efforts private placement basis of up to CA$50 million consisting of common shares and common share purchase warrants of the Company. The Company has retained Scotiabank and Canaccord Genuity Corp. to act as lead agents in connection with the Offering and the equity financing.

The net proceeds of the Offering and any equity financing are expected to be used (1) for the expansion of the underground mining operations at its Marmato Project, including development of the MDZ, construction of an additional 4,000 tpd processing plant and additional tailings storage facilities, and (2) to escrow funds for the payment of interest during the first two years on the Notes.

The terms of the Offering and any equity financing, including final terms and conditions of the Notes and pricing of the offered securities, are subject to finalization based on market conditions.  Closing of the Offering and any equity financing is subject to the receipt of all necessary regulatory approvals, including the approval of the TSX Venture Exchange. Additional terms and conditions of the Offering and timing for the closing of the Offering and any equity financing will be announced by the Company at a later date.

All securities issued pursuant to the Offering and any equity financing will be subject to a hold period expiring four months and one day after the date of issuance. 

About Caldas Gold

Caldas Gold is a Canadian junior mining company currently advancing a prefeasibility study for a major expansion and modernization of its underground mining operations at its Marmato Project in the Department of Caldas, Colombia with mineral resources of 2.0 million ounces of gold in the Measured and Indicated categories and 3.3 million ounces in the Inferred category. A Preliminary Economic Assessment study (Preliminary Economic Assessment Report, Marmato Project, Colombia, dated February 6, 2020 completed by SRK Consulting (U.S.), Inc.) is available on the Company’s SEDAR profile at www.sedar.com.