BULLETIN V2024-3016
SANTACRUZ SILVER MINING LTD. ("SCZ")
BULLETIN TYPE: Property-Asset or Share Purchase Amending Agreement
BULLETIN DATE: October 10, 2024
TSX Venture Tier 2 Company
TSX Venture Exchange has accepted for filing documentation pertaining to an omnibus agreement dated October 3, 2024 (the "Omnibus Agreement") among the Company, several entities directly or indirectly owned by the Company, and two subsidiaries of Glencore plc (collectively, "Glencore"). The Omnibus Agreement amends certain terms of the transaction documents with Glencore concerning the Company's purchase of Glencore's Bolivian mining assets, which was completed on March 18, 2022, restructuring the financial obligations and considerations payable by the Company under the transaction documents.
Under the terms of the Omnibus Agreement, the Company will pay Glencore a total of US$80,000,000 in eight annual installment of US$10,000,000 each, beginning on or before November 1, 2025, with the option to accelerate payments under certain conditions.
Additionally, the Company grants Glencore a contingent value right ("CVR") that involves monthly payment of US$1,333,333.33, capped at US$77,700,000 (the "CVR Cap"), if zinc prices exceed US$3,850 per tonne (the "Base Price"), with incremental increases of US$83,333.33 for each US$100 rise in price up to US$5,049.99 per tonne. If zinc prices exceed US$5,050 per tonne (the "Bonus Payment Price"), additional payment of US$166,666.66 will be triggered for each increase of US$100 per tonne above the Bonus Payment Price, with 50% of such payment being treated as a CVR payment counting toward the CVR Cap, and the remaining 50% of such payment not counting toward the CVR Cap being the "Bonus Payments". Furthermore, Glencore can mandate the Company to hedge a portion of its zinc production under specified conditions at a hedge price equal to or greater than the Base Price. The CVR and the Bonus Payments will end on the earlier of (i) December 31, 2032, and (ii) the CVR Cap being reached.
The transaction is arm's length in nature, and no finder's fees are payable.
For more details, please refer to the Exchange Bulletin dated March 23, 2022, and the Company's news releases dated October 13, 2021, November 15, 2021, March 21, 2022, April 4, 2024 and October 4, 2024.
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