Denarius Metals Corp. (TSXV: DSLV) (OTCQX: DNRSF) ('Denarius Metals' or the 'Company') announced today that the Company plans to complete a non-brokered private placement of up to 40,000,000 common shares of the Company at a price of CA$0.50 per common share for gross proceeds of up to CA$20,000,000 (the 'Offering'). It is anticipated that the closing of the Offering will occur on or about September 6, 2023.
Completion of the Offering is subject to receipt of TSX Venture Exchange ('TSXV') approval. The common shares issuable in connection with this Offering will be subject to a hold period expiring four months and one day after the date of issuance.
The Company intends to use the net proceeds of the Offering (i) to pay for the Phase 1 construction activities nearing completion in the third quarter of 2023 at the Company's Zancudo Project in Colombia, including access road construction, plant site refurbishment, the acquisition and installation of new crushing equipment, and associated civil works, (ii) to fund the Phase 2 construction at the Zancudo Project including acquisition and installation of a new concentrate plant, tailings storage facility construction and other site infrastructure, and (iii) for working capital and general corporate purposes.
Serafino Iacono, Executive Chairman and CEO of Denarius Metals, commented, 'The Zancudo Project is rapidly taking shape as our first mine to come into operation and will provide us with an ongoing source of internally generated cash flow as we explore and develop our larger polymetallic projects in Spain. Designing the Zancudo Project to focus on producing and selling a concentrate once the Phase 2 construction is completed allows us to minimize the start-up capital investment and to limit the local environmental impact at the site. We have recently completed the third phase of our validation and in-fill drilling program at our Lomero Project in Southern Spain. Final assays are pending and we expect to have a drilling update shortly. Europa Metals announced on August 4, 2023 that the current drill campaign at the Toral Project in Northern Spain is nearing its close and all holes have intersected mineralization as expected and the intersections reported to date have correlated well with the known existing resource. With the support of further institutional investment to strengthen our equity through the proposed private placement, and the engagement of a market maker, we remain focused on enhancing shareholder value as we endeavor to bring our portfolio of projects into production over the next couple of years.'
The Zancudo Project, 100% owned by Denarius Metals, is located in a historic mining district in the Municipality of Titiribi, Department of Antioquia, Colombia, approximately 30 km SW of Medellin. The Zancudo Project, which includes the former producing Independencia Mine, was the subject of approximately 40,000 meters of exploration drilling carried out between 2011 and 2022 by Gran Colombia Gold (now Aris Mining) and IAMGOLD. The Company announced in its press release on March 1, 2023 that it had completed a maiden Mineral Resource estimate prepared by SRK Consulting (U.S.), Inc. ('SRK') with total Inferred Resources of 2.8 million tonnes grading 6.5 g/t gold and 112 g/t silver totaling 576,000 ounces of gold and 10.0 million ounces of silver. At a gold equivalent grade of 8.0 g/t, the Inferred Resources total approximately 718,000 gold equivalent ounces based on a 4 g/t AuEq cut-off grade over a 1.0 m minimum mining width. This initial Mineral Resource estimate confirmed the historically significant high gold-silver grade potential of this project which remains open for further expansion in all directions.
Earlier this year, the Company partnered with an experienced local contract miner who will be responsible for mine development and mineral extraction at the Zancudo Project. The mine contractor is currently carrying out preparatory work, targeting the existing mine workings and veins of the Independencia Mine in anticipation of commencing mining operations in 2024 at the rate of approximately 500 tonnes per day ('tpd'). With further development, the Company anticipates increasing the mining rate to about 1,000 tpd in 2025. The Company is currently working with SRK on the preparation of a preliminary economic assessment ('PEA') for the Zancudo Project. The PEA will be based on a mine plan related to the Mineral Resource estimate announced earlier this year and is expected to be completed in the third quarter of 2023.
Concurrently, the Company is moving ahead with other essential elements required to bring the Zancudo Project into operation next year. Construction has already commenced and is proceeding well on an approximately 3.7 km access road that will connect the site infrastructure with the regional highway, allowing transportation to bypass the Town of Titiribi and other local communities in the immediate area of the project. The former plant site outside the entrance to the Independencia Mine has been cleared and refurbished. Installation of the new crushing equipment, which has recently arrived at site, is getting underway. Mining and environmental permits are well advanced and expected to be received in the next few months. The Company is finalizing the specifications for a new concentrate plant to be ordered for delivery and installation next year and has selected a site for the tailings storage facility within its land package at the project site. The Company intends to produce concentrate at site that will then be shipped and sold to an end customer. Discussions with several offtake customers are underway. The Company also expects to commence an in-fill drilling program later this year to upgrade and expand the current Mineral Resource estimate and for ongoing mine planning purposes.
Market Maker
Denarius Metals announced today that, subject to regulatory approval, it has engaged the services of ICP Securities Inc. ('ICP') to provide market-making services in accordance with TSXV policies. ICP will trade shares of the Company on the TSXV and all other trading venues with the objectives of maintaining a reasonable market and improving the liquidity of the Company's common shares. ICP is a Toronto-based CIRO dealer-member that specializes in market making and liquidity provision. Established in 2023, with a focus on market structure, execution and trading, ICP has leveraged its own proprietary technology to deliver high quality liquidity provision and execution services to a broad array of public issuers and institutional investors.
Under the agreement, ICP will receive compensation of CA$7,500 per month in advance. The agreement is for an initial term of four months and will renew for additional one-month terms unless terminated. The agreement may be terminated by either party with 30 days' notice. There are no performance factors contained in the agreement and ICP will not receive shares or stock options as compensation. ICP does not own any shares of the Company. ICP and the Company are unrelated and unaffiliated entities.
Stock Option Grants
The Company also announced today that it has granted a total of 400,000 stock options to two third party firms providing advisory and consulting services to the Company. Each stock option is exercisable at CA$0.55 per common share for a three-year term to expiry. The stock options will fully vest by the first anniversary of the respective advisory and consulting agreements.
No U.S. Offering or Registration
This news release does not constitute an offer to sell, or the solicitation of an offer to buy securities in any jurisdiction, including the United States, other than the provinces and territories of Canada. The securities being offered pursuant to the Offering have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the 'US Securities Act'), or the securities laws of any state of the United States. Such securities may not be offered or sold in the United States or to, or for the account or benefit of, any U.S. Person (as defined in Regulation S of the US Securities Act) or person in the United States except in a transaction exempt from or not subject to the registration requirements of the US Securities Act and applicable state securities laws.
About Denarius Metals
Denarius Metals is a Canadian junior company engaged in the acquisition, exploration, development and eventual operation of polymetallic mining projects in high-grade districts, with its principal focus on the Lomero Project in Spain. The Company signed a definitive option agreement with Europa Metals Ltd. in November 2022 pursuant to which Europa has granted Denarius Metals two options to acquire up to an 80% ownership interest in the Toral Zn-Pb-Ag Project, Leon Province, Northern Spain. The Company's 100%-owned Zancudo Project in Colombia provides an opportunity to develop near-term production and cash flow through local contract miners and long-term growth through exploration.
This news release contains 'forward-looking information', which may include, but is not limited to, statements with respect to the Offering, TSX Venture Exchange conditional approval, the use of proceeds of the Offering, the Company's strategic plans, timing and expectation of mining rates, construction and drilling programs and estimates of mineral resources. Often, but not always, forward-looking statements can be identified by the use of words such as 'plans', 'expects', 'is expected', 'budget', 'scheduled', 'estimates', 'forecasts', 'intends', 'anticipates', or 'believes' or variations (including negative variations) of such words and phrases, or state that certain actions, events or results 'may', 'could', 'would', 'might' or 'will' be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Denarius to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Factors that could cause actual results to differ materially from those anticipated in these forward-looking statements are described under the caption 'Risk Factors' in the Company's Annual Information Form dated April 21, 2023 which is available for view on SEDAR at www.sedar.com. Forward-looking statements contained herein are made as of the date of this press release and Denarius disclaims, other than as required by law, any obligation to update any forward-looking statements whether as a result of new information, results, future events, circumstances, or if management's estimates or opinions should change, or otherwise. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, the reader is cautioned not to place undue reliance on forward-looking statements.
Cautionary Statement on Mineral Resources
Mineral resources are not mineral reserves and do not have demonstrated economic viability. The estimate of mineral resources may be materially affected by environmental, permitting, legal, title, socio-political, marketing, or other relevant issues. In particular, the quantity and grade of reported inferred mineral resources are uncertain in nature and there is insufficient exploration to define these inferred mineral resources as an indicated or measured mineral resource in all cases. It is uncertain in all cases whether further exploration will result in upgrading the inferred mineral resources to an indicated or measured mineral resource category.
Contact:
Michael Davies
Tel: (416) 360-4653
Email: investors@denariusmetals.com
DENARIUS METALS CORP. 
