(TheNewswire)
Toronto – TheNewswire - January 22, 2024 - AbraSilver Resource Corp.(TSXV:ABRA ) ; ( OTC:ABBRF) ("AbraSilver" or the “Company”) is pleased to announce it has executed adefinitive option and joint venture agreement (the “Agreement”)with a subsidiary of Teck Resources Limited (“Teck”), to exploreand develop the La Coipita copper-gold project (“La Coipita” orthe “Project”) in San Juan, Argentina (the “Transaction”). This announcement follows on from the Company’s news release dated January 2,2024 , which contemplated theTransaction.
The Agreement grants Teck an option to acquire an 80%interest in La Coipita by funding cumulative exploration expendituresof US$20,000,000 over a five-year period, making staged cash paymentsto, and an equity placement in AbraSilver totaling US$3,000,000(including an initial mandatory payment of US$500,000), and making upto US$6,300,000 in optional cash payments in respect of amountspayable to the underlying Project vendors. Following an initialtransition period during which AbraSilver will support fieldoperations, Teck is expected to act as operator for the duration ofthe Option (as defined below).
John Miniotis, President and CEO, commented, “We areextremely pleased to be partnering with Teck in order to advance thehighly prospective La Coipita project. As the drilling field seasonis now opening-up at site, we expect an active drill campaign tocommence shortly, and look forward to keeping all stakeholders updatedon the exploration progress.”
Key Terms of the Transaction
Pursuant to the Agreement, Teck has an op ti on (the “Option”) to acquire an80% interest in the Project. Teck may exercise the Option by:
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Making the following payments to or equity placement inAbraSilver:
I. Initial mandatorycash payment of US$500,000;
II. On or beforeJanuary 31, 2025, a cash payment of US$1,000,000 or at Teck’selection, subscription for US$1,000,000 of common shares of AbraSilver(“ABRA Shares”) to be priced at the greater of (a) a 25% premiumto the preceding 20-day volume weighted average price of the ABRAShares, or (b) C$0.35 per ABRA Share; and
III. On or beforeJanuary 31, 2028, a cash payment of US$1,500,000.
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Incurring an aggregate of US$20,000,000 in explorationexpenditures on the Project over a five-year period; and
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Making up to US$6,300,000 in op ti onal cash payments in respect ofamounts payable to the underlying Project vendors.
Upon exercise of the Op ti on, the par ti es will incorporate a company inArgen ti na (“Newco”) tobecome the ti tleholder ofthe Project. Teck will hold 80% of Newco’s outstanding shares, withAbraSilver holding the remaining 20%. Each party will fund itspro-rata share of future expenditures on the Project through equitycontribu ti ons to Newco orincur dilu ti on in Newco.If a party’s shareholding interest in Newco is diluted below 10% orpursuant to certain other conditions of the Agreement, itsshareholding interest will be converted to a 1.1% net smelter returnsroyalty on the Project, of which 0.6% can be bought back by the payorfor a cash payment of US$3,000,000 at any ti me.
About AbraSilver
AbraSilver is an advanced-stage exploration companyfocused on rapidly advancing its 100%-owned Diablillos silver-goldproject in the mining-friendly Salta province of Argentina. Thecurrent Measured and Indicated Mineral Resource estimate forDiablillos consists of 53.3 Mt grading 87 g/t Ag and 0.79 g/t Au,containing approximately 148Moz silver and 1.4Moz gold, withsignificant further exploration upside potential. In addition, theCompany has entered into an earn-in option and joint venture agreementwith Teck on the La Coipita project, whereby Teck can fund up to US$20million in exploration expenditures and make certain other payments toearn up to an 80% interest. AbraSilver is listed on the TSX-V underthe symbol “ABRA” and in the U.S. under the symbol“ABBRF”.
For further information please visit the AbraSilverResource website at www.abrasilver.com , ourLinkedIn page at , and follow us on Twitter at
Alternatively please contact:
John Miniotis, President and CEO
Tel: +1 416-306-8334
Cautionary Statements
This news release includes certain"forward-looking statements" under applicable Canadiansecurities legislation. Forward-looking statements are necessarilybased upon a number of estimates and assumptions that, whileconsidered reasonable, are subject to known and unknown risks,uncertainties, and other factors which may cause the actual resultsand future events to differ materially from those expressed or impliedby such forward-looking statements. All statements that address futureplans, activities, events or developments that the Company believes,expects or anticipates will or may occur are forward-lookinginformation. There can be no assurance that such statements will proveto be accurate, as actual results and future events could differmaterially from those anticipated in such statements. Accordingly,readers should not place undue reliance on forward-looking statements.When considering this forward-looking information, readers should keepin mind the risk factors and other cautionary statements in theCompany’s disclosure documents filed with the applicable Canadiansecurities regulatory authorities on SEDAR+ at www.sedarplus.ca. Therisk factors and other factors noted in the disclosure documents couldcause actual events or results to differ materially from thosedescribed in any forward-looking information. The Company disclaimsany intention or obligation to update or revise any forward-lookingstatements, whether as a result of new information, future events orotherwise, except as required by law.
Neither the TSX Venture Exchange nor its RegulationServices Provider (as that term is defined in the policies of the TSXVenture Exchange) accepts responsibility for the adequacy or accuracyof this news release.
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