VANCOUVER, British Columbia -- (Business Wire)
Telson Mining Corporation (“Telson” or the “Company”)
(TSX-V – TSN, OTC Pink – SOHFF, Frankfurt – TSGN (formerly SQ82)) is
pleased to announce that it has reached an agreement to amend the terms
of its Loan Agreement dated June
13, 2018 (the “Loan Agreement”) with Nyrstar Canada (Holdings) Ltd
(”Nyrstar”). The amended terms of the Loan Agreement will help Telson to
better manage its cash flows at Campo Morado in a subdued zinc price
environment.
Effective November 19, 2018, Telson and Nyrstar agreed to amend the
terms of the Loan Agreement to reduce the monthly principal repayment
from US$1.0 million to US$500,000, which also effectively extends the
repayment period of the US$6.5 million balance that was due under the
Loan Agreement.
The main terms of the amended Loan Agreement are as follows:
1) Telson agreed to pay on or before November 23, 2018 an amount of
US$500,000 as principal repayment plus any accrued interest. (Paid)
2)
Telson will make monthly principal repayments of US$500,000 on the 13th
day of each month starting on December 13, 2018 and up until October
2019, plus any accrued interest.
3) The interest rate did not
change and was kept at a rate of 10% per annum.
4) Along with the
monthly principal repayments mentioned above, Telson will also pay:
a) 70% of any monthly free cash flow generated by Telson; plus any
monthly excess cash balance above US$500,000; plus
b) 50% of the
monthly free cash flow generated by Telson on the Tahuehueto Project
once Telson declares commercial production.
Telson has agreed to repay in full the balance of the Loan Agreement no
later than October 31, 2019.
Antonio Berlanga, Telson’s Chief Executive Officer stated: “We are very
pleased with the cooperation of Nyrstar in providing Telson an extended
time frame within which to repay the Nyrstar loan in reduced monthly
payments. The current global trade wars have adversely affected
commodity prices world-wide and are most likely the main reason for the
instability in the price of zinc over the past several months which have
impacted Campo Morado’s revenues. These reduced monthly payments agreed
to by Nyrstar help us better manage our positive cash flows from this
project. We note that after a somewhat steep decline in zinc prices from
the US$1.40/lb range to the US$1.05/lb range, zinc prices have recovered
to the US$1.20/lb range.”
About Telson Mining Corporation
Telson Mining Corporation is
a Canadian based mining company with two Mexican gold, silver and base
metal mining projects. Telson is currently in commercial production at
its 100% owned Campo Morado Mine in Guerrero, Mexico. Effective May 15,
2018 Telson declared commercial production at Campo Morado. Telson is
currently producing zinc and lead concentrates with gold, silver and
copper as by-products, processing approximately 2,000+ tons per day
through the Campo Morado milling facilities.
Telson's 100% owned Tahuehueto Project, located in north-western Durango
State, Mexico is currently in construction development. Pre-production
commenced at Tahuehueto in August 2017, currently mining at a rate
averaging approximately 200 tonnes per day and shipping ore to a
third-party toll mill for processing. Management has a targeted timeline
at Tahuehueto to be producing with its own on-site mineral processing
plant, with a designed capacity of at least 1,000 tonnes per day, during
the first quarter of 2019.
Regular metal concentrate deliveries and sales are well underway from
both projects.
Visit: www.telsonmining.com
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 at Tahuehueto, Telson is
mining reserves supported by a pre-feasibility published early 2017
while at Campo Morado pre-production mining is proceeding without the
benefit of pre-feasibility or feasibility studies that outline mineral
reserves and has 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 Campo Morado 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 was 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).This will soon
be replaced by a pre-feasibility study (“PFS”) that will allow the
application of modifying factors to the mineral resources to allow a
portion of them to be converted to mineral reserves.
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 possible events,
conditions or financial performance that is 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 by the use of 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, the continuity
of the price of gold, zinc, lead 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.
View source version on businesswire.com: https://www.businesswire.com/news/home/20181127005248/en/
Contacts:
Glen Sandwell, Corporate Communications Manager
ir@telsonmining.com
Tel:
+1 (604) 684-8071
Source: Telson Mining Corporation
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