Aftermath closes Cachinal buy, $2.55M placement

Oct 31, 2019

2019-10-30 19:46 ET – News Release

Mr. Michael Williams reports

AFTERMATH CLOSES CACHINAL TRANSACTION AND OVER-SUBSCRIBED PRIVATE PLACEMENT

Aftermath Silver Ltd., upon closing the Cachinal transaction and private placement (each as defined herein), has met the requirements to be listed as a TSX Venture Exchange Tier 2 category issuer. The company expects that effective at the opening of markets on Nov. 4, 2019, the company’s listing will move from the NEX to the TSX-V and will begin trading under the symbol AAG.

The company’s definitive agreement with Halo Labs Inc. (formerly Apogee Opportunities Inc.) (see news release dated June 27, 2019) to purchase its holding in the Cachinal silver-gold project has also been approved. Aftermath Silver will purchase Halo’s shares in the Chilean holding company, Minera Cachinal SA, representing 80-per-cent ownership of the project. In consideration, the company issued to Halo a convertible debenture in the principal amount of $1,575,000, which is convertible into common shares of the company at 20 cents at the option of Halo. The principal amount of the convertible debenture is to be repaid in accordance with the following schedule:

$250,000 on closing;
$250,000 on or before six months following closing;
$525,000 on or before the first anniversary of closing;
$550,000 on or before 18 months following closing.

Additionally, the company has closed a non-brokered private placement of 31,985,462 units at a price of eight cents per unit for gross proceeds of $2,558,836.96, as previously announced on Feb. 6, 2019, June 27, 2019, July 19, 2019, and July 24, 2019. Each unit sold consists of one common share in the capital of the company and one-half of one non-transferable common share purchase warrant. Each warrant is exercisable by the holder to acquire one common share for a period of 36 months from closing at a price of 12 cents per common share.

All securities issued pursuant to the private placement will be subject to a hold period expiring four months and a day following the date of closing.

An aggregate amount of $83,400 in cash was paid as finders’ fees in connection with the private placement.

The private placement is considered to be a “related party transaction,” as defined under Multilateral Instrument 61-101, as a result of participation by an insider of the company. The company intends to rely on the exemptions from the valuation and minority shareholder approval requirements of MI 61-101 contained in sections 5.5(b) and 5.7(a) of MI 61-101. The company intends to rely on the exemptions from the prospectus requirements contained in Section 2.5 of National Instrument 45-106 to issue the units to the insider under the private placement.

The company intends to use the proceeds of the private placement for the payment of consideration required in connection with the Cachincal acquisition to finance the initial work program at Cachinal and for working capital purposes.

Ralph Rushton, the president and chief executive officer of Aftermath Silver, commented: “We are excited to see Aftermath Silver graduate to Tier 2 and to finally close the first of two planned private placements. I’d like to thank our investors for their patience as we completed the application process. The company is one of only a few pure silver plays available for investors, and we’re seeing renewed optimism in the silver market. With initial funding in place, we can now begin detailed planning of our priority exploration program at Cachinal. We can also move forward with our marketing campaign for Aftermath Silver, explaining our plans to the resource investment community across North America and Europe.”

Cachinal project, Chile

Today the company filed on its SEDAR profile a copy of the National Instrument 43-101 technical report entitled “Independent Technical Report for the Cachinal Silver-Gold Project, Region II, Chile,” prepared by qualified persons G. Cole and J. Couture of SRK Consulting (Canada) Inc. for Aftermath Silver. A copy of the technical report can be found on the company’s SEDAR profile.

Cachinal is a low-sulphidation epithermal deposit which hosts a current Canadian Institute of Mining, Metallurgy and Petroleum-compliant, 18.4-million-silver-ounce indicated mineral resource (5.66 million tonnes of 101 grams per tonne) and three-million-silver-ounce inferred mineral resource (820,000 million tonnes of 115 g/t), with associated gold credit. The project is located in Chile’s Antofagasta region (Region II), about 40 kilometres east of the Pan American highway, in a nearly flat plain at an elevation of around 2,700 metres above sea level, 16 km north of Austral Gold’s Guanaco gold-silver mine.

Shallow drilling has defined the current mineral resources principally to a depth of 150 m below surface and provides sufficient evidence to interpret the presence of high-grade shoots within the vein system extending below the base of a potential open pit. Following these high-grade shoots to depth with drilling will be the initial focus of the company’s efforts to expand the silver-gold mineralization. The oxidation level bottoms at about 120 to 150 m below surface; however, the down-dip extent of the mineralized structures remains unknown.

Aftermath Silver is planning an extensive work program, which will include:

Developing revised long sections for each vein and plan down-dip drilling targeting the high-grade ore shoots below the open-pit shells;
3-D laser surveying of voids to better target the drilling;
Executing down-dip drilling programs in a staged manner;
Obtain metallurgical samples from the main veins, the low-grade oxide halo, and advance the metallurgical leaching testwork;
Updating the geological mapping and review targets outside of mineral resource.

Challacollo project, Chile

As previously announced by news releases dated Aug. 1, 2018, and Jan. 15, 2019, the company continues to make progress with respect to its proposed acquisition of the Challacollo silver-gold project. The company has recently submitted all applicable documentation to the TSX-V, and the acquisition is subject to TSX-V approval. See the company’s news release dated Jan. 15, 2019, for details regarding the proposed terms of the acquisition.

About Aftermath Silver Ltd.

Aftermath Silver is a Canadian junior exploration company engaged in acquiring, exploring and developing mineral properties with an emphasis on silver in Chile. The company is focused on growth through the discovery and acquisition of quality projects in stable jurisdictions. Aftermath Silver continues to seek new opportunities to take advantage of the relatively low silver price.

Qualified person

Peter Voulgaris, MAIG, MAusIMM, a consultant to the company, is a non-independent qualified person as defined by National Instrument 43-101. Mr. Voulgaris has reviewed the technical content of this news release, and consents to the information provided in the form and context in which it appears.

We seek Safe Harbor.

https://aftermathsilver.com/