Telson Receives Conditional Approval for a US$12Mn Line of Credit from International Investment Bank to Finalize Tahuehueto Gold Mine Construction

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September 24, 2019
Telson Receives Conditional Approval for a US$12Mn Line of Credit from International Investment Bank to Finalize Tahuehueto Gold Mine Construction
Vancouver, British Columbia, September 4, 2019

Telson Mining Corporation (“Telson” or the “Company” (TSX-V, OTC Pink-SOHFF, Frankfurt-TSGN (formerly SQ82)) is pleased to announce that it has received conditional approval for a US$12 million medium term loan from an International Investment Bank (“Bank”) to finalize construction at Tahuehueto.

 

Having successfully completed technical, financial and commercial due diligence on Telson and its mining projects, an international lending banking institution has granted conditional approval to the credit facility outlined below.

 

Material Terms of the Line of Credit;

 

1.     Facility Amount: US$12 Million

2.      Term: 36 months from the Closing Date.

3.     Grace Period: 12-months from Closing Date on principal repayments

4.     Repayment Schedule: Principal repayments begin after the 12-month Grace Period with 24 equal monthly repayments.

5.     Interest Rate: 12.5% per annum.

6.     Agent Warrants:0.75 warrant per every US$1 raised for the total facility amount. One full warrant will be exercisable for 48 months from date of closing at an Exercise Price equal to a 22.5% premium on the lesser of

7.     Fees:

a)   the 20 VWAP as quoted on the TSXV as of the date of the Closing date or

b)  C$0.34, the closing price of Telson as of April 26, 2019, the date of initial mandate entered into by the parties.


a.      Origination Fee: 2% of the Facility Amount, to be paid to the Bank.

b.      Arrangement Fee: 2% for any amount of the Line of Credit to be syndicated by the Bank to third party lenders.

c.       Commitment Fee: 2% per annum on the available, but undrawn balance of the Facility Amount, payable quarterly in arrears.

 

Final approval, subject to satisfactory completion of conditions precedent, conditions subsequent and documentation materially as follows:


a)       Completion by Telson of a minimumUS$5.0 million additional funding,

b)      Satisfactory conclusion of the legal due diligence, (underway) and,

c)      Completion of agreements including loan agreements and security pledge agreements, (preparation underway).

 

Telson´s  President,  Ralph  Shearing  and Jose  Antonio  Berlanga,  CEO,  will  be  attending  the  2019  Precious  Metals Summit Beaver Creek next week to continue the efforts of raising additional funds to satisfy the funding condition outlined above. Once the funding outlined above is secured, Telson estimates that it can complete construction of its flagship Tahuehueto gold mine project within six months and thereby take advantage of the increasing interest in the gold market sector.

 

The   most   recent   technical   report   published   in   January   2017   for   Tahuehueto,   a  prefeasibility   study   and reserve/resource calculation prepared by Metal Mining Consultants Inc. based in Highlands Ranch, Colorado, shows the project contains probable reserves of 3.3 million tonnes grading 3.4g/tonne gold, 41.8 g/tonne silver, 0.31% copper,1.1% lead and 2.0% zinc. Furthermore, resources inclusive with reserves, were calculated at Measured and Indicated (M&I) 6.1 million tonnes grading 2.48 g/tonne gold, 42.8 g/tonne silver, 0.31% copper,1.2% lead and 2.15% zinc plus Inferred Resources of 3.5 million tonnes grading 1.3 g/tonne gold, 37.5 g/tonne silver, 0.27% copper,1.34% lead and 2.44% zinc.

 

About Telson Mining Corporation

Telson Mining Corporation is a Canadian based mining company with two 100% owned Mexican gold, silver and base metal mining projects.

Telson's Tahuehueto mining project, located in north-western Durango State, Mexico is currently under development and waiting for final funding to complete construction of the processing plant and related assets to produce concentrates in its own on-site mineral processing plant, with a designed capacity of at least 1,000 tonnes per day and subject to funding is targeting completion of construction during Q2 2020. Pre-production toll milling is underway with plans to process 3,000 to 5,000 tonnes of ore on a monthly basis until it’s own on-site 1,000 tpd processing plant is operational, where construction has advanced to approximately 70% completion.

Campo Morado is a polymetallic base metal mine with mining and milling equipment capable of producing up to 2,500 tonnes per day; which has been placed into care and maintenance pending better economic conditions and community relationships allowing for a restart of mining operations.

Qualified Persons

This press release was prepared under the supervision and review of Ralph Shearing, P.Geol., President and Director of Telson Mining Corporation, a Professional Geologist registered in Alberta as a member of the professional association APEGA, and a Qualified Person as defined by NI 43-101.

Visit: www.telsonmining.com

On Behalf of the Board of Directors

(signed) “Antonio Berlanga”

Antonio Berlanga, CEO and Director

Cautionary Note Regarding Production Decisions and Forward-Looking Statements

Statements contained in this news release that are not historical facts are “forward-looking information” or “forward-looking statements” (collectively, “Forward-Looking Information”) within the meaning of applicable Canadian securities laws. Forward Looking Information includes, but is not limited  to, disclosure  regarding possible events,  conditions or financial performance that  is based  on  assumptions 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 for processing at its own mineral processing facility on the Tahuehueto project site. In certain cases, Forward-Looking Information can be identified by the use of words and phrases such as “plans”, “expects”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or variations of such words and phrases. In preparing the Forward-Looking Information in this news release, the Company has applied several material assumptions, including, but not limited to, that the current exploration, development, environmental and other objectives concerning the Campo Morado Mine and the Tahuehueto Project can be achieved, the continuity of the price of gold and other metals, 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 different from any future results, performance or achievements expressed or implied by the Forward-Looking Information. There can be no assurance that Forward-Looking Information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on Forward-Looking Information. Except as required by law, the Company does not assume any obligation to release publicly any revisions to Forward-Looking Information contained in this news release to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

For further information about Telson Mining Corporation, please contact:

Glen Sandwell

Corporate Communications Manager ir@telsonmining.com

Tel: +1 (604) 684-8071

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