2022-06-10 | TSXV:AAG | Press release

Vancouver, British Columbia–(Newsfile Corp. – June 10, 2022) – Aftermath Silver Ltd. (TSXV: AAG) (OTCQX: AAGFF) (the “Company” or “Aftermath Silver”) is pleased to announce that it has entered into a non-binding term sheet (the “Term Sheet”) to sell its holding of 100% in the Cachinal De La Sierra silver and gold project (the “Cachinal Project” or “Cachinal”), located in the Cachinal de la Sierra region in the Chilean region of Antofagasta (Region II) in Honey Badger Silver Inc. (TSXV:TUF) (“Honey Badger”). The proposed transaction includes an exclusivity period that ends August 15, 2022. Aftermath Silver and Honey Badger are working diligently to finalize a definitive agreement by that date.

Ralph Rushton, President of Aftermath Silver, commented: “We are pleased to announce the sale of the Cachinal silver-gold project to Honey Badger. Our priority is to advance the Berenguela silver-copper-manganese project in Peru, and the sale of Cachinal – which has become non-essential to us as our work at Berenguela has progressed – represents the fastest way to potentially unlock value in the project for our shareholders. In addition to cash and stock payments, we will receive production payments when commercial production begins and we will also maintain an NSR.

summary of transactions

The term sheet provides that Honey Badger, or an affiliate, will acquire all of the issued and outstanding shares of Minera Cachinal SA, a wholly owned subsidiary of Aftermath, on the following terms:

  • Split payment: C$1,000,000 in shares of Honey Badger payable at closing and at the greater of: (i) the volume weighted average trading price of the common shares of Honey Badger on the TSXV for a period of thirty (30) trading days immediately preceding the date of the announcement of the transaction and (ii) the maximum discount price permitted under the policies of the TSXV.

  • Cash payment: a) CA$400,000 payable at closing, b) CA$452,000 six months after closing, c) CA$400,000 on May 21, 2023 and d) CA$400,000 eighteen months after closing.

  • Royalties: Honey Badger will grant a 1% net smelter return royalty with a full buyout option at Honey Badger’s sole discretion for a purchase price of C$8,500,000;

  • Production payments: Upon commencing commercial production, Honey Badger will pay in cash or stock, at Aftermath’s option, C$0.50 per payable silver ounce produced at the Cachinal project, capped at C$2,000,000 in payments.

The detailed terms and conditions of the proposed transaction will be set out in the definitive documentation to be negotiated between the parties, which will contain the parties’ customary representations, warranties and covenants as well as customary indemnities and closing conditions. There can be no assurance that the proposed transaction will be completed on the terms contemplated, or at all. Readers are referred to the section below titled: “Caution Regarding Forward-Looking Information“.

Although the term sheet is not binding, the parties have agreed to a mutual severance indemnity of CA$250,000 in the event that a definitive agreement is not reached before the expiration of the exclusivity period in due to a party’s action or inaction, subject to certain exceptions beyond the control of the parties. The proposed transaction will be subject to regulatory approvals, including the approval of the TSX Venture Exchange (the “TSXV”).

Qualified person

Michael Parker, Member of AusIMM and Non-Independent Director of Aftermath, is a Non-Independent Qualified Person as defined by NI 43-101. Mr. Parker has reviewed the technical content of this press release and consents to the information provided in the form and context in which it appears.

About Aftermath Silver Ltd.

Aftermath Silver Ltd is a leading Canadian junior silver-focused exploration company and aims to create shareholder value through the discovery, acquisition and development of quality silver projects in stable jurisdictions . Aftermath has developed a pipeline of projects at various stages of development. The Company’s projects have been selected based on their potential for growth and development.

  • Berenguela Silver-Copper Project. The Company has the option to acquire a 100% stake through a binding agreement with SSR Mining. The project is located in the department of Puno, in south-central Peru. An NI 43-101 Technical Report on the property was filed in February 2021 (available on SEDAR and on the Company’s webpage). The Company is currently drilling at Berenguela and plans to advance the project through a pre-feasibility study.

  • Silver-Gold Challacollo Project. The Company has the option to acquire a 100% interest in the Challacollo silver-gold project through a binding agreement with Mandalay Resources; see the Company’s press release dated June 27, 2019. An NI 43-101 Mineral Resource was published on December 15, 2020 (available on SEDAR and on the Company’s webpage). The Company is currently permitting road access in anticipation of an upcoming drilling program.

  • Cachinal Silver-Gold Project. The Company recently agreed to terms of sale of its interest in the Cachinal Ag-Au project, located 2.5 hours south of Antofagasta, to Honey Badger Silver Inc.

ON BEHALF OF THE BOARD OF DIRECTORS

Ralph Rushton”

Ralph Rushton

CEO and Director

604-484-7855

Neither the 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.

Caution Regarding Forward-Looking Information

Certain statements and information contained in this press release constitute “forward-looking information” within the meaning of applicable Canadian provincial securities laws. Any statement or information that expresses or involves discussions regarding the interpretation of exploration programs and drilling results, predictions, expectations, beliefs, plans, projections, objectives, assumptions, or events or performance future (often, but not always, using words or phrases such as “expects”, “is expected”, “anticipates”, “believes”, “plans”, “projects”, “estimates”, “assumes”, “intends”, “strategies”, “targets”, “objectives”, “forecasts”, “goals”, “budgets”, “schedules”, “potential” or variations thereof or indicating that certain actions, events, or results “could”, “could”, “would”, “could” or “will” be taken, occur or be carried out, or the negative form of any of these terms and expressions similar) are not statements of historical fact and may be forward-looking statements or information. tives.

These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in these forward-looking statements. Although the Company believes that the expectations expressed in these forward-looking statements are based on reasonable assumptions, these statements are not guarantees of future performance and actual results or developments may differ materially from those contained in the forward-looking statements. Factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, changes in commodity prices; changes in the expected performance of mineral production; unexpected increases in capital costs; operating and exploration results; the continued availability of capital and financing; and general economic, market or business conditions. In addition, forward-looking statements are subject to various risks, including, but not limited to, operational risk; Political risk; risk of change ; risk of inflation of the cost of capital; that the data is incomplete or inaccurate. Readers are encouraged to consult the Company’s filings with Canadian securities regulators for information on these and other risk factors, which can be accessed through Aftermath Silver’s profile at www.sedar.com.

There is no certainty that any forward-looking statement will occur and investors should not place undue reliance on such forward-looking statements. The Company does not undertake to provide updates to the forward-looking statements contained in this release, except as required by law.

Cautionary Note to US Investors – Mineral Resources

This press release has been prepared in accordance with the requirements of National Instrument 43-101 and the Canadian Institute of Mining, Metallurgy and Petroleum Definition Standards, which differ from the requirements of United States securities laws. NI 43-101 is a rule developed by the Canadian Securities Administrators that establishes standards for any public disclosure by an issuer of scientific and technical information regarding mining projects. Canadian public disclosure standards, including NI 43-101, differ significantly from the requirements of the United States Securities and Exchange Commission, and information regarding mineralization, deposits, mineral reserves and contained resource information or referred to herein may not be comparable to similar information disclosed by US companies.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/127370

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