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Caldas Gold Corp
Symbol CGC
Shares Issued 99,800,162
Close 2020-11-05 C$ 2.30
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Caldas closes Marmato precious metal stream deal

2020-11-05 19:07 ET - News Release

Mr. Mike Davies reports


Caldas Gold Corp. has entered into a definitive precious metal purchase agreement with Wheaton Precious Metals International Ltd., a wholly owned subsidiary of Wheaton Precious Metals Corp., in respect of the company's Marmato project, located in Colombia. The Marmato project comprises an existing operating mine (the Upper mine) and the Marmato Deeps zone (MDZ) development, both of which are covered by the precious metal stream. Scotiabank acted as financial adviser to Caldas Gold.

Wheaton International will purchase 6.5 per cent of the gold production and 100 per cent of the silver production from the Marmato project until 190,000 ounces of gold and 2.15 million ounces of silver have been delivered, after which the stream drops to 3.25 per cent of the gold production and 50 per cent of the silver production for the life of mine. Under the precious metal stream, Wheaton International will make an upfront deposit payment in cash of $110-million (U.S.), $38-million (U.S.) of which is payable within six months, subject to customary conditions, and the remaining portion of which is payable during the development and construction of the MDZ project, subject to receipt of required permits and licences, sufficient financing having been obtained to cover total expected capital expenditures, and other customary conditions. In addition, Wheaton International will make continuing payments equal to 18 per cent of the spot gold and silver prices until the uncredited portion of the upfront payment is reduced to zero, and 22 per cent of the spot gold and silver prices thereafter. The precious metal stream is effective July 1, 2020.

The upfront deposit will be used by the company to finance the advancement of the development and construction of the MDZ project.

In connection with the precious metal stream, the company and its subsidiaries have provided security in favour of Wheaton International in respect of their obligations under the precious metal stream, including a first-ranking general security agreement over substantially all properties and assets of the company and its subsidiaries, security over the mining rights comprising the Marmato project, and a first-ranking share pledge over the shares of each of the subsidiaries of the company.

Wheaton International has agreed to enter into an intercreditor agreement with project lenders (including the gold-linked notes) advancing funds, the proceeds of which will be used to develop, construct or expand the MDZ project. In the case of the intercreditor agreement relating to the gold-linked notes, generally, in the event of an enforcement action or insolvency proceeding in relation to the company, an amount equal to 15 per cent of the collateral proceeds from such action or proceeding is required by the terms of the intercreditor agreement to be applied toward the obligations of the precious metal stream, and the remaining proceeds will be available for distribution to holders of gold-linked notes to satisfy the obligations of the company under the indenture governing the gold-linked notes.

The company is committed to supporting the communities in which it operates through its ESG (environmental, social and corporate governance) initiatives. As part of the precious metal stream, the company has confirmed to Wheaton International that it will provide financing to support the local communities around the Marmato project.

About Caldas Gold Corp.

Caldas Gold is a Canadian junior mining company, currently advancing a major expansion and modernization of its underground mining operations at its Marmato project in the department of Caldas, Colombia. Caldas Gold also owns 100 per cent of the Juby project, an advanced exploration-stage gold project located within the Shining Tree area in the southern part of the Abitibi greenstone belt about 100 kilometres south-southeast of the Timmins gold camp.

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