Mr. William Murray of Prospero reports
PROSPERO SECURES ADDITIONAL INVESTMENT FROM FORTUNA SILVER MINES
Prospero Silver Corp. has arranged a $270,000 (U.S.) (approximately $356,000) strategic investment from Fortuna Silver Mines Inc., a growth-oriented mid-tier precious metal producer. Fortuna currently owns an aggregate of 10,714,284 common shares of the company, representing an aggregate of 20.32 per cent of the current issued and outstanding shares. Following the completion of the private placement, Fortuna will own 15,460,951 shares in Prospero, or approximately 26.9 per cent of the company's issued share capital.
Subject to TSX Venture Exchange approval, Fortuna has agreed to purchase 4,746,667 common shares at 7.5 cents per share. The closing of the private placement is subject to the completion of certain other conditions customary for financings of this nature. Prospero will allocate the proceeds of the private placement to drill testing the company's Bermudez project in Chihuahua state, Mexico. Drilling began at Bermudez in late August and Prospero plans to complete a three-hole (approximately 1,500 metres) diamond drill program at Bermudez.
Pursuant to Multilateral Instrument 61-101, Protection of Minority Security Holders in Special Transactions, which is incorporated by reference into the policies of the TSX-V under Policy 5.9, this private placement constitutes a related party transaction as a result of Fortuna's current share position, making it a related party of the company. The company is relying upon the formal valuation exemption in Section 5.5(a) of MI 61-101 and upon the minority approval exemption in Section 5.7(a) of MI 61-101. Such exemptions are available to the company as, at the time the subject transaction was agreed to, neither the fair market value of the subject matter of nor the fair market value consideration for the transaction, insofar as it involves interested parties, exceeds 25 per cent of the company's market capitalization.
This completes the private placement phase of the amended strategic agreement between Prospero and Fortuna, which was announced on May 10, 2017. Under the amended agreement, Fortuna has the right to select two projects to explore under joint venture with Prospero.
The 430-hectare Bermudez project is in Chihuahua, about 150 kilometres west of the city of Chihuahua. Additional mapping and sampling have been completed on the 2.5-kilometre strike length of the high-level, low-sulphidation vein system. Based on assay results of 51 new samples, the best locations for three drill sites have been selected to test the potential for deeper mineralization. Additional information on Bermudez can be found on the company's website.
Tawn Albinson, MSc, president of the company, is a qualified person, as defined in National Instrument 43-101, and is responsible for the technical content of this news release. Mr. Albinson is a member of the American Institute of Professional Geologists and a certified professional geologist (CPG No. 11368).
About Fortuna Silver Mines Inc.
Fortuna is a growth-oriented precious metal producer focused on mining opportunities in Latin America. Fortuna's primary assets are the Caylloma silver mine in southern Peru, the San Jose silver-gold mine in Mexico and the Lindero gold project in Argentina.
About Prospero Silver Corp.
Prospero is a Mexico-focused project generator whose aim is to discover world-class precious metal projects in the major mineral belts of Mexico. The company applies a unique blend of practical exploration experience, cutting-edge mineral deposit science and an extensive knowledge of Mexico's geology to find new gold and silver systems.
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