Zacatecas Silver upsizes financing to $18 million

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Zacatecas Silver Corp. [ZAC-TSXV] said Friday it is increasing the size of a previously announced private placement share offering and now expects to raise $18 million. That is up from the previous target of $15 million.

Under the upsized deal terms, a syndicate of agents has agreed to sell by way of a private placement up to 15 million subscription receipts for $1.10 each, raising $16.5 million. In addition, the company said it intends to complete a concurrent non-brokered private placement offering of 1.36 million subscription receipts on the same terms, raising $1.5 million and increasing the total amount of the financing to $18 million.

Zacatecas Silver holds 7,826 hectares of ground in Zacatecas State, Mexico, within the highly prospective Fresnillo Silver Belt, which has produced over 6.2 billion ounces of silver. The company said its Zacatecas property is highly prospective for low and intermediate sulphidation silver-base metal mineralization and potentially low sulphidation gold-dominant mineralization.

In December, 2021, Zacatecas announced a mineral resource estimate for the property’s Panuco Deposit, consisting of 2.7 million tonnes at 187 g/t silver equivalent (AgEq) or 16.4 million ounces AgEq

The property is 25 kilometres south-east of MAG Silver Corp.’s [MAG-TSX; MVG-NYSE MKT] Juanicipio Mine and Fresnillo PLC’s Fresnillo Mine. It shares common boundaries with Pan American Silver Corp. [PAAS-TSX, NASDAQ] claims, and El Orito, which is owned by Endeavour Silver Corp. [EDR-TSX, EXK-NYSE].

On February 28, 2022, Zacatecas said it has entered into a share purchase agreement with a unit of Alamos Gold Inc. [AGI-TSX, NYSE] to acquire the advanced stage Esperanza Gold Project in Morelos State, Mexico.

Zacatecas has described the Esperanza project as a high-grade oxide gold deposit with scalable upside. It hosts a historic measured and indicated resource of 34.3 million tonnes at 0.98 g/t gold and 8.09 g/t silver or 1.08 ounces of gold and 8.9 million ounces of silver.

On top of that is an inferred resource of 718,000 tonnes at 0.80 g/t gold and 15.04 g/t silver or 18,000 ounces of gold and 347,000 ounces of silver.


Zacatecas said its priority is to prepare an updated resource estimate in 2022 and complete a current economic study on the Esperanza Gold project, based on the updated resource estimate.

However, Zacatecas said most of the payments related to the US$60 million transaction will not be made unit significant steps towards commercial production are achieved.  The initial consideration consists of US$5 million in cash, US$10 million in Zacatecas Silver shares and a silver stream in favour of Alamos worth US$6 million.

Part of the proceeds raised from the offering will be used partially to satisfy the US$5 million cash consideration in the Alamos deal, begin advancing the Esperanza Project towards production, fund the ongoing drill program at the company’s existing silver project, and general working capital purposes.

On Friday, Zacatecas shares were unchanged at $1.30 and currently trade in a 52-week range of $1.89 and 52 cents.

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