Zacatecas Silver in its US$60 million acquisition of the Esperanza Gold Project and $19.15 subscription receipt offering

On April 12, 2022, Zacatecas Silver announced it had acquired the Esperanza Gold Project, a high-grade oxide gold deposit located in Morelos State, Mexico from Minas De Oro Nacional, a subsidiary of Alamos Gold Inc., for aggregate consideration of approximately US$60 million. At closing, Zacatecas: (i) paid Minas de Oro US$5 million; (ii) issued a total of 12,140,000 common shares for a deemed value of US$10 million; and (iii) granted a silver stream in favour of Alamos valued at US$6 million. The remainder of the consideration will be paid in contingent payments upon the achievement of certain milestones at the Esperanza Gold Project. With this acquisition, Zacatecas plans to carry out an extensive work program to prepare an updated resource estimate, undertake economic studies on the project, and conduct an infill drill program on the deposit as well as drilling on nearby exploration targets.

In order to fund such work programs and to fund the cash component of the consideration due on closing, Zacatecas completed a brokered offering of subscription receipts for gross proceeds of C$19.5m with a syndicate of agents led by Clarus Securities Inc. Upon the closing of the acquisition of the Esperanza Gold Project, the proceeds from the subscription receipt offering were released from escrow and each subscription receipt converted into one common share and one half of one purchase warrant of Zacatecas.

Zacatecas is an emerging Mexico-based silver and gold company with multiple advanced stage exploration projects.

Osler, Hoskin & Harcourt LLP advised Zacatecas as purchaser and issuer’s counsel with a team consisting of Alan Hutchinson, Patrick Sullivan and Natalie Holtby (Corporate).