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GSilver Closes Oversubscribed Equity Financing of US$10,722,659.33

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GSilver Closes Oversubscribed Equity Financing of US$10,722,659.33






Guanajuato Silver Company Ltd. (TSX-V:GSVR) is pleased to announce the closing of its equity financing of subscription receipts at a price of C$0.33 (equivalent to approximately US$0.256) per Subscription Receipt announced on June 29, 2022 – “GSilver to Acquire 100% of Great Panther’s Mexican Mining Assets“; and July 7, 2022 – “GSilver Increases Debt and Equity Financing Package to US$15.3M.” Subscriptions totaling US$10,722,659.33 (C$13,822,178.04) have been received with the funds (less 50% of the agent’s cash commission and advisory fees) held in escrow by the Company’s escrow agent, Odyssey Trust Company. The escrowed funds will be released from escrow upon satisfaction of certain release conditions, including the completion of the Company’s purchase of Great Panther Mining’s (TSX:GPR) Mexican subsidiary, Minera Mexicana Rosario S.A. de C.V. which owns the producing Topia mine and production facility, the San Ignacio mine, the Valenciana Mine Complex and the Cata processing plant in Mexico.


Upon closing of the MMR Acquisition, each Subscription Receipt will automatically convert into one unit of GSilver consisting of one common share and one share purchase warrant and the escrowed funds and any interest thereon (less the balance of the Agent’s cash commission, advisory fees and expenses) will be released to the Company. Each GSilver warrant will be exercisable for one GSilver share at a price of C$0.50 for a period of 36 months following closing of the MMR Acquisition. If the escrow conditions are not satisfied within 90 days, the escrowed funds and any interest thereon will be returned to the purchasers of Subscription Receipts and such Subscription Receipts will be cancelled. The Company anticipates completing the MMR Acquisition within the next two weeks.


Research Capital Corporation and Canaccord Genuity Corp. acted as co-lead agents and joint bookrunners for the Equity Financing, along with Echelon Wealth Partners Inc. and Roth Canada Inc. The Company has paid the Agents a cash commission equal to 6% (2% for arm’s length purchasers and 0% for non-arm’s length purchasers on the Company’s president’s list) of the gross proceeds from the Equity Financing and issued agents’ warrants equal to 6% (2% for arm’s length purchasers and 0% for non-arm’s length purchasers on the President’s List) of the total number of Subscription Receipts sold. The Agents will also be paid an advisory fee equal to $298,000 and 905,695 Agents’ Warrants. Each Agents’ Warrant entitles the holder to purchase one common share of the Company at a price of $0.33 for a period of three years following completion of the MMR Acquisition. One-half of the Agency Fee has been placed in escrow with the subscription funds pending closing of the MMR Acquisition.


Certain directors and officers of GSilver also participated in the Equity Financing.


Debt Component:


In conjunction with the Equity Financing, GSilver has also signed a concentrate pre-payment facility term sheet with Ocean Partners (UK), a metals off-take and trading firm, to provide US$5.0M of financing towards the purchase price of MMR and general corporate and working capital purposes. The OP Facility will be for a term of 24 months, secured by a share pledge over MMR and repayable over a period of 21 months following a three-month grace period. Interest on the OP Facility will be calculated at 12-month LIBOR + 7.5%. Closing of the OP Facility will occur concurrently with the MMR Acquisition.


All securities issued in connection with the Equity Financing are subject to a four month hold period expiring November 22, 2022. The MMR Acquisition remains subject to TSXV approval and there are no assurances that the Company will successfully complete such acquisition on the terms currently contemplated or at all.

Gregory T. Chu, A Law Corporation acted as legal counsel to GSilver and McCarthy Tétrault LLP acted as legal counsel to the Agents.


About Guanajuato Silver Company 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, Mexico, which has an established 480-year mining history.


Posted July 22, 2022

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