ALIEN METALS LIMITED
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nor for Distribution in the United States
Trading Symbols
AIM: AGQ
TSX-V: AGQ
FWB: I3A
27 November 2015
Arian Silver Signs Settlement Deed with Quintana
Arian Silver Corporation ("Arian" or the "Company"), a silver mining company
focussed on silver projects in the silver belt of Zacatecas, Mexico, announces
that further to its announcement on 29 October 2015 of the termination of the
letter of intent and non-binding term sheet with Quintana AGQ Holding Co. LLC,
it has now signed an acknowledgement of the Default Notice announced on 3
November 2015 ("Acknowledgement") and has further entered into a settlement
deed ("Settlement Deed") with Quintana AGQ Holding Co. LLC and its affiliates
(together, "Quintana").
Terms of the Settlement Deed
Quintana is entitled to exercise its foreclosure rights under the terms of the
senior secured financing arrangement announced on 15 October 2014 and 30
October 2014, and accordingly pursuant to the Acknowledgement, Quintana has
exercised its security and taken ownership of Arian Silver de Mexico SA de CV
and its assets, including the San José project.
Arian, through a new subsidiary, will retain the San Celso, Calicanto and Los
Campos projects along with all other mining concessions held at the time when
the Company became public on the AIM and TSXV in 2006, such remaining
concessions all comprising more than 1,600 hectares.
As at 31 October 2015, Arian's accrued debt under the senior secured financing
arrangement with Quintana amounted to approximately US$17.8 million with the
initial repayment commencing in April 2016. In addition the outstanding balance
under the Base Metal Purchase Agreement ("BMPA") with Quintana amounted to
US$15.2 million.
Given the current metal prices, in particular the silver price, together with
the mechanical issues and resulting delays suffered during commissioning of the
La Tesorera processing plant, the San José operation will require a further
significant cash injection to make the project viable. In light of the
aforementioned security arrangements and financial difficulties, together with
Quintana's unwillingness to waive the timing of any default under the
agreements, the Board in conjunction with its legal advisors, has concluded
that an orderly foreclosure process under the terms of the Settlement Deed was
the only viable option available to the Company, that it was in the best
interests of both shareholders and creditors, and that otherwise, the Company
would not be able to meet its financial commitments as they fall due.
Under the terms of the Settlement Deed, on closing (expected by 31 December
2015), Quintana will release Arian from its obligations under the senior
secured loan arrangement as well as the BMPA and Investment Agreement dated 14
October 2014. Closing will be deemed to have occurred upon inter alia the
Company having delivered to Quintana all documentation regarding the
transitional matters as aforementioned.
In return for receiving certain indemnities and releases, Quintana has paid
US$650,000 to Arian, giving a positive net working capital position of
US$478,000. In addition, Quintana will pay to Arian a further US$50,000 upon
closing as described above. In the event closing has not completed on or before
31 December 2015, Quintana will have the right to demand reimbursement of the
US$650,000 payment. The funds paid by Quintana are not tied to a specific use
of proceeds and may be expended before closing, but together with existing
cash, are currently expected to sustain the Company to February 2016.
Upon completion of the foreclosure process and closing of the transaction,
Arian will be debt-free and have no liability for the outstanding creditor
balances in Mexico of approximately US$1.9 million.
Ongoing Strategy
The San Celso, Calicanto and Los Campos concessions include high grade
brownfield gold and silver projects in Zacatecas in close proximity to existing
mines, all of which benefit from excellent infrastructure. In addition, Arian
is in discussions to grow its asset portfolio to include strategically located
mining concessions.
The Company will need to raise additional funds for its projects in Mexico and
for general working capital purposes; discussions are currently underway in
this regard.
Jim Williams, Chief Executive Officer of Arian commented: "Despite this setback
we must first take stock, and then look ahead to the future. As a management
team we are focussed on a return to growth with the raising of funds,
acquisition of additional mining concessions, and continuing of exploration
activity."
The Company's shares will remain suspended until further notice.
For further information please contact:
Arian Silver Corporation Cantor Fitzgerald Europe
Jim Williams, CEO Stewart Dickson / Jeremy
David Taylor, Company Secretary Stephenson / David Porter /
Patrick Pittaway
(London) +44 (0)20 7894 7000
OR
Yellow Jersey PR Limited
Dominic Barretto
(London) +44 (0)7768 537 739
dominic@yellowjerseypr.com
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that
term is defined in the policies of the TSX Venture Exchange) and no stock
exchange, securities commission or other regulatory authority accepts
responsibility for the adequacy or accuracy of this release nor approved or
disapproved of the information contained herein.
Forward-Looking Information
This press release contains certain "forward-looking information". All
statements, other than statements of historical fact that address activities,
events or developments that the Company believes, expects or anticipates will
or may occur in the future. This forward-looking information reflects the
current expectations or beliefs of the Company based on information currently
available to the Company as well as certain assumptions (including in
particular, that the necessary administrative steps required to receive
additional funding from Quintana, that additional finance will otherwise be
available, that any remaining mining concessions will contain mineral resources
or can be developed commercially, that any discussions will lead to the
acquisition of additional mining concessions, or that it will be viable to
continue exploration activities). Forward-looking information is subject to a
number of significant risks and uncertainties and other factors that may cause
the actual results of the Company to differ materially from those discussed in
the forward-looking information, and even if such actual results are realized
or substantially realized, there can be no assurance that they will have the
expected consequences to, or effects on the Company.
Any forward-looking information speaks only as of the date on which it is made
and, except as may be required by applicable securities laws, the Company
disclaims any intent or obligation to update any forward-looking information,
whether as a result of new information, future events or results or otherwise.
Although the Company believes that the assumptions inherent in the
forward-looking information are reasonable, forward-looking information is not
a guarantee of future performance and accordingly undue reliance should not be
put on such information due to the inherent uncertainty therein.
Arian Silver : Signs Settlement Deed with Quintana
November 27, 2015 at 04:59 am EST
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© PRNewswire - 2015
