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Abraplata Resource arranges $15-million financing

2020-08-06 17:56 ET - News Release

Mr. John Miniotis reports

ABRAPLATA ANNOUNCES $15.0 MILLION PRIVATE PLACEMENT LED BY ERIC SPROTT TO ACCELERATE GROWTH

Abraplata Resource Corp. intends to complete a non-brokered private placement for aggregate gross proceeds of up to $15,000,120 through the issuance of up to 55,556,000 units of the company, to be priced at 27 cents per unit. Eric Sprott has indicated his intention to invest up to $10-million in the offering and will subscribe for up to 37,037,037 units.

Each unit will consist of one common share in the capital of the company and one-half of one share purchase warrant. Each warrant will entitle the holder to purchase one additional common share at a price of 40 cents until the second anniversary of the closing date of the offering. Notwithstanding the foregoing, in the event that the daily high trading price of the common shares on the TSX Venture Exchange surpasses 70 cents following the closing of the offering for 20 consecutive trading days, the company may, within 30 days of the occurrence of such event, deliver a notice to the holders of warrants accelerating the expiry date to the date that is 30 days following such notice and any unexercised warrants after such period shall automatically expire.

John Miniotis, president and chief executive officer of Abraplata, commented: "The strong investment interest in Abraplata by Eric Sprott is a clear reflection of the exposure and leverage that our Diablillos project provides in a rising silver and gold price environment. Upon completion of this financing, Abraplata will have over $20-million of cash on its balance sheet, which will provide us with the needed financial flexibility to aggressively advance Diablillos and to accelerate our exploration efforts on the surrounding regional property package."

The proceeds of the offering will be used for exploration of the company's mineral properties and for general corporate purposes.

The offering is scheduled to close on or about Aug. 27, 2020, and is subject to certain conditions, including, but not limited to, the receipt of all necessary approvals of the TSX Venture Exchange. The securities to be issued under this offering will be offered by way of private placement exemptions in all the provinces of Canada. The units to be issued under this offering will also be offered offshore, including in the United Kingdom pursuant to applicable exemptions and in the United States on a private placement basis pursuant to exemptions from the registration requirements of the United States Securities Act of 1933, as amended.

The company may pay fees to certain finders, including Clarus Securities Inc., in respect of the offering.

Abraplata anticipates that certain insiders, including Mr. Sprott, will acquire securities in the offering. To the extent that such insiders participate in the offering, any such participation would be considered a related party transaction as defined under Multilateral Instrument 61-101.

About Abraplata Resource Corp.

Abraplata is a mineral exploration company with a diversified portfolio of silver-gold and copper exploration projects in Argentina and Chile. The company is focused on advancing its 100-per-cent-owned Diablillos silver-gold project in the mining-friendly Salta province of Argentina, which is well advanced, with more than $35-million (U.S.) spent historically on exploration, with drilling continuing and an initial open-pit preliminary economic assessment (PEA) completed in 2018. The company is led by an experienced management team and has long-term supportive shareholders, including Altius Minerals and SSR Mining. In addition, Abraplata owns the Arcas project in Chile, where Rio Tinto has an option to earn up to a 75-per-cent interest by financing up to $25-million (U.S.) in exploration.

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