GSilver unveils $8.25 million financing

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Guanajuato Silver Co. Ltd. [GSVR-TSXV], a company that was previously known as Vangold Mining Corp., on Thursday said it expects to raise $8.25 million from a private placement financing, with proceeds earmarked for its assets in Mexico.

Guanajuato Silver (also known as GSilver) said it has arranged a non-brokered private placement offering of 15 million units priced at 55 cents each. Each unit consists of one common share and one half of a share purchase warrant. Each whole warrant can be used to purchase one common share for 75 cents for a period, subject to acceleration, of two years after closing.

On November 17, 2021, Vangold shares closed unchanged at 60 cents and currently trade in a 52-week range of 74 cents and 20 cents.

Vangold is and exploration and development company engaged in reactivating past-producing silver and gold mines near the city of Guanajuato, Mexico.

GSilver recently acquired the El Cubo mine from Endeavour Silver Corp. (EDR-TSX, EXK-NYSE), which has subscribed for 5.75 million units ($3.16 million) of the offering, raising its interest in GSilver to 12.63% from 10.37%.

Endeavour’s increased interest in GSilver also derives from the issuance of 901,224 shares to Endeavour in connection with the company’s early payment of Endeavour’s US$2.5 million promissory note that was issued in connection with the acquisition of the El Cubo mine.

El Cubo is a 480-year-old underground gold-silver mining complex which is located in El Cubo village, approximately 10 kilometres east of Guanajuato city.

Endeavour announced in April, 2012, that it had agreed to buy AuRico Gold’s 100% stake in the El Cubo mine for a total consideration of up to US$250 million.

The complex has historically produced roughly 2.0 million ounces of gold and 80 million ounces of silver, but has been closed since November, 2019.

Prior to the El Cubo deal, GSilver’s flagship asset was the El Pinguico Project, an historic silver and gold mine that is located in Guanajuato and was in production in the late 1880s until 1913. Covering 71 hectares and comprised of two mining concessions – El Carmen and El Pinguico – the project is close to several active mining operations, including Endeavour’s El Cubo and Bolanitos mine and mill complexes.

The company is now focused on the refurbishment of the El Cubo mill, and swift commencement of production from El Cubo and El Pinguico Combined Operation, as well as delineating additional gold and silver resources through underground and surface drilling on its projects in this historic mining camp.

GSilver has said it plans to use El Cubo’s 1,500-tonne per day mill to process stockpiled material that is currently available at its El Pinguico mine.

On Thursday, GSilver said Ocean Partners Holdings Ltd., a company that has pledged to purchase all of GSilver’s silver and gold concentrate for an 18-month term commencing on October, 2021, is subscribing for one million units of the offering.


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