The Prospector News

GSilver Arranges Early Payment of US$2.5M Note to Endeavour Silver

You have opened a direct link to the current edition PDF

Open PDF Close
Uncategorized

Share this news article

GSilver Arranges Early Payment of US$2.5M Note to Endeavour Silver

 

 

 

 

 

~ Signs Collective Bargaining Agreement with El Cubo Union ~

 

 

Guanajuato Silver Company Ltd. (TSX-V:GSVR) (OTCQX:GSVRF) announces that it has arranged for early payment of the US$2.5 million promissory note issued to Endeavour Silver Corp. in connection with the Company’s acquisition of the El Cubo mine and mill complex due April 9, 2022. In consideration for the early payment, Endeavour has agreed to reduce the principal amount of the note by US$25,000 and settle the Mexican value added tax payable on the purchase price for El Cubo represented by the note for common shares of the Company. Subject to acceptance of the TSX Venture Exchange, the Company will issue a total of 901,224 common shares to Endeavour at a deemed price of C$0.55 per share to settle VAT totalling US$396,000 (C$495,573 based on the Bank of Canada indicative exchange of C$1.2517 = US$1.00 on November 15, 2021). The VAT Shares will be subject to a hold period of four months and one day from the date of issuance.

 

Endeavour currently owns 21,331,058 common shares or 10.37% of the issued and outstanding shares of GSilver and will hold a total of 22,232,282 common shares or approximately 10.76% of GSilver following completion of the VAT Settlement. As such, the VAT Settlement constitutes a “related party transaction” as defined in Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions. However, as neither the fair market value of the VAT Settlement nor the fair market value of the VAT Shares to be issued to Endeavour will exceed 25% of GSilver’s market capitalization, the VAT Settlement will be exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 pursuant to sections 5.5(a) and 5.7(1)(a) of MI 61-101.The Company will file a material change report in connection with the VAT Settlement less than 21 days before the expected closing date of such transaction, which the Company deems reasonable in the circumstances to be able to complete the VAT Settlement in an expeditious manner.

 

Collective Bargaining Agreement:

 

The Company is also pleased to announce that it has signed, through its Mexican subsidiary Obras Mineras El Pinguico, S.A. de C.V., a new Collective Bargaining Agreement with El Sindicato Nacional De Trabajores Mineros, Metalúrgicos, Siderúrgicos y Similares De La Republica Mexicana, the union representing workers at the Company’s El Cubo mining operations.

 

The long-term agreement calls for the Company to adhere to all Mexican federal labour laws pertaining to health and safety within the mine and plant, and to basic federal standards of compensation. As is customary with these agreements, salaries will be reviewed yearly with employee benefits being reviewed on a bi-annual basis.

 

James Anderson, Chairman and CEO said: “We are very pleased to have proactively entered into this agreement with the Union, establishing long-term labor tranquility and goodwill at our El Cubo operation. We see this agreement existing within a framework of enduring co-operation with the Union, and with Union workers. We welcome a continuation of the collaboration that we have had with the Union throughout this process.”

 

Major Points to the Agreement:

 

  1. GSilver has met its objective of negotiating and entering into a new CBA with favorable base level economics for its mining operations at El Cubo. The agreement has been ratified and filed with the Federal Board of Conciliation and Arbitration in Mexico City.
  2. Annual costs associated with having this new CBA represent a significant cost savings compared with the former CBA at El Cubo.
  3. A relationship of mutual respect has been achieved between GSilver and the Union.

 

As compensation to the Union for terminating its last CBA (in place for over 70 years with multiple previous employers) and establishing a more modern and straightforward CBA with GSilver, the Company has agreed to make a one-time payment  of 10 million Mexican pesos (approximately US$490k) to the Union, payable in instalments over an 18-month period. Subject to acceptance of the TSXV and final approval of the Union, a portion of the One-Time Payment may be satisfied in GSilver shares.

 

About Guanajuato Silver Co. Ltd.:

 

GSilver mines and processes silver and gold concentrate from its El Cubo mine and mill. The Company continues to delineate additional silver and gold resources through underground drilling at El Cubo and its nearby El Pinguico project. Both projects are located within 11km of the city of Guanajuato, which has an established 480-year mining history.

 

Posted November 16, 2021

Share this news article

MORE or "UNCATEGORIZED"


Hemlo Explorers Announces Closing of First Tranche of Non-Brokered Private Placement

Hemlo Explorers Inc. (TSX-V: HMLO) is pleased to announce that it... READ MORE

November 26, 2021

Pasinex Announces Third Quarter 2021 Financial Results

Pasinex Resources Limited (CSE: PSE) (FSE: PNX) reports the Compa... READ MORE

November 25, 2021

Contact Gold Closes First Tranche of Private Placement Financing

Contact Gold Corp. (TSX-V: C) (OTCQB: CGOLF) is pleased to announ... READ MORE

November 25, 2021

Benton and Sokoman Announce Gold Discovery at the Grey River Gold Project, Southern Newfoundland

Assays for six of 13 core samples, “super rushed” for... READ MORE

November 25, 2021

Metallica Metals Intersects High Grade Gold Mineralization in First Drill Holes Completed on Starr Gold-Silver Project

Metallica Metals Corp. (CSE:MM) (OTC:MTALF) (FWB:SY7P) is ple... READ MORE

November 25, 2021

We acknowledge the [financial] support of the Government of Canada.

Government of Canada Supported
Copyright 2021 The Prospector News