SOHFF - Telson Finalizes Trust Agreement with Trafigura Mexico
(TheNewswire)
Vancouver, British Columbia - TheNewswire - November 16, 2020 - Telson Mining Corporation (" Telson " or the" Company " (TSX V: TSN ) ( OTC:SOHFF )( Frankfurt:TSGN (formerly SQ82)) is pleased toannounce that it has executed a trust agreement (the"Trust") with Trafigura Mexico S.A. de C.V.("Trafigura") as mandated under the terms of the waiverrequest agreement (the "Waiver Agreement") entered intobetween both parties in April 2020. Terms of the Waiver Agreement wereannounced in the Company's April 17, 2020 newsrelease .
Under the terms of the Waiver Agreement, Trafigurawaived all defaults plus deferred, all principal and interest paymentsuntil June 30, 2021, under certain terms and conditions, related tocertain loan agreements entered into between the parties in late 2017. Additionally, Telson agreed to place its assets into the Trust toguarantee full repayment of all outstanding financial obligationsunder the loan agreements with Trafigura.
The execution of the Trust is a significant step inTelson's financing plans to fund final construction at its Tahuehuetogold mine project. The Trust and Waiver Agreement allow for theaddition of other secured creditors to enter the Trust to fully securetheir potential investment, with ranking in security behindTrafigura.
Over the past months, Telson has advanced itsTahuehueto construction plans and budget with specific quotes fromservice and equipment providers for the major components of theconstruction plans and currently calculates a construction budget atapproximately US $13 million, including a 15% contingency.
To fully fund the construction budget, Telson iscontemplating to enter into a US$12 million medium term loan facilitywith Accendo Banco S.A. Institucion de Banca Multiple("Accendo"), the possibility of a small silver stream metalpurchase funding or conducting a private placement financing tosupplement the Accendo loan for Tahuehueto construction, and toprovide working capital.
It is noted that a series of approvals from variousparties will be necessary to perfect Telson's funding plans.
"After a thorough process, Telson and Trafigurahave established a Mexican trust mechanism which secures Trafigura'sloans. This now allows Telson to rapidly advance funding plans tosecure the necessary capital to complete the construction of itspartially built Tahuehueto gold mine project." states RalphShearing, CEO, "Our construction plans and budget estimates aresubstantially complete to allow Trafigura to thoroughly analyseTelson's ability to complete construction with the funding currentlytargeted. Although a number of due diligence initiatives are stilloutstanding, Telson expects the funding plans toclose and immediately thereafter to allow construction at the mine torecommence."
About Telson Mining Corporation
Telson Mining Corporation is a Canadian based mining company with two100% owned Mexican gold, silver and base metal mining projects.
Telson's Tahuehueto mining project, located innorth-western Durango State, Mexico is waiting for final funding tofinish construction of the processing plant and related assets toproduce gold, silver, lead, and zinc in concentrates within its ownon-site mineral processing facility, with a designed capacity of atleast 1,000 tonnes per day. The Company is targeting completion ofconstruction during 2021, six to eight months after securing finalfunding.
Campo Morado is a polymetallic base metal mine withmining and milling equipment currently producing at an average ofapproximately 2,150 tonnes per day. Four months after purchasing CampoMorado, Telson brought the mine back into operation initiatingpreproduction in October 2017 and declared commercial production inMay 2018, operating the mine continuously for 22months until August 2019 when the project was put on care andmaintenance as a result of declining zinc prices and community issues. With improving current conditions Telson brought the mine out of careand maintenance and reinitiated mining and milling operations duringJanuary 2020.
Visit: www.telsonmining.com
On Behalf of the Board ofDirectors
(signed) "RalphShearing"
Ralph Shearing, President, CEO andDirector
Cautionary Note Regarding ProductionDecisions and Forward-Looking Statements
It should be noted that Telsondeclared commercial production at Campo Morado prior to completing afeasibility study of mineral reserves demonstrating economic andtechnical viability. Accordingly, readers should be cautioned thatTelson's production decision has been made without a comprehensivefeasibility study of established reserves such that there is greaterrisk and uncertainty as to future economic results from the CampoMorado mine and a higher technical risk of failure than would be thecase if a feasibility study was completed and relied upon to make aproduction decision. Telson has completed a preliminary economicassessment ("PEA") mining study on the Campo Morado minethat provides a conceptual life of mine plan and a preliminaryeconomic analysis based on the previously identified mineral resources(see News Release dated November 8, 2017 and April 4,2018).
Statements contained in this newsrelease that are not historical facts are "forward-lookinginformation" or "forward-looking statements"(collectively, "Forward-Looking Information") within themeaning of applicable Canadian securities laws. Forward LookingInformation includes, but is not limited to, disclosure regarding theplanned recommencement of mining operations at Campo Morado; and otherpossible events, conditions or financial performance that are based onassumptions 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 forprocessing at its own mineral processing facility on the Tahuehuetoproject site. In certain cases, Forward-Looking Information can beidentified by the use of words and phrases such as "plans","expects", "scheduled", "estimates","forecasts", "intends", "anticipates" orvariations of such words and phrases. In preparing the Forward-LookingInformation in this news release, the Company has applied severalmaterial assumptions, including, but not limited to, that the currentexploration, development, environmental and other objectivesconcerning the Campo Morado Mine and the Tahuehueto Project can beachieved; that recommencement of operations at Campo Morado willproceed as planned; the continuity of the price of gold and othermetals, 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 differentfrom any future results, performance or achievements expressed orimplied by the Forward-Looking Information. There can be no assurancethat Forward-Looking Information will prove to be accurate, as actualresults and future events could differ materially from thoseanticipated in such statements. Accordingly, readers should not placeundue reliance on Forward-Looking Information. Except as required bylaw, the Company does not assume any obligation to release publiclyany revisions to Forward-Looking Information contained in this newsrelease to reflect events or circumstances after the date hereof or toreflect the occurrence of unanticipated events.
Neither TSX VentureExchange nor its Regulation Services Provider (as that term is definedin the policies of the TSX Venture Exchange) accepts responsibilityfor the adequacy or accuracy of this release.
For further information about TelsonMining Corporation, please contact:
Glen Sandwell
Corporate Communications Manager
ir@telsonmining.com
Tel: +1 (604) 684-8071
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