Silver Hammer Mining Corp. (CNSX:HAMR) entered into a definitive share purchase agreement to acquire Shafter Silver Project in Presidio County in Southwest Texas from Aurcana Silver Corporation (TSXV:AUN.H) for $13.2 million on September 27, 2023. The consideration to be paid by Silver Hammer for the Shafter Project includes cash of $800,000 (less certain exclusivity fees and expenses prepaid by Silver Hammer), 23,000,000 common shares in the capital of Silver Hammer, certain contingent payments totaling up to $3,375,000 and the settlement of Aurcana?s debt related to the Shafter Project totaling $6,517,662 in aggregate.

Upon the completion of the Purchaser?s first equity financing following the closing of the Transaction, Aurcana will receive an additional cash payment of $375,000. Aurcana may also receive the Contingent Payments upon the achievement of certain milestones within 48 months of Closing in the aggregate amount of up to $3,000,0000, as follows: (a) up to $1,000,000 will be payable in connection with the first public announcement of a new mineral resource estimate on the Shafter Project, (b) $1,000,000 will be payable upon the Shafter Project entering commercial production, (c) $500,000 will be payable if the spot price of silver is equal to or greater than $30 per ounce for a period of 60 consecutive days, and (d) an additional $500,000 will be payable if both milestones (b) and (c), above, are met. Pursuant to the Debt Settlement, the Purchaser will acquire all of the outstanding notes of the Company in the aggregate principal amount of $6,517,662 from the Noteholders in exchange for (a) the issuance of an aggregate of 4,000 debenture units of the Purchaser, each consisting of one $1,000 principal amount of secured convertible debentures of the Purchaser and 2,000 common share purchase warrants of the Purchaser, (b) an aggregate of 8,000,000 units of the Purchaser, with each Unit consisting of one Purchaser Share and one-half of a Warrant.

Each whole Warrant entitles the holder thereof to purchase an additional Purchaser Share at a price of $0.33 per Purchaser Share for a period of 24 months following Closing. Completion of the Transaction is subject to a number of conditions, including: (i) the receipt of all required approvals of the shareholders of Aurcana and Silver Hammer; (ii) the receipt of all necessary regulatory and third party consents, approvals and authorizations, including all necessary stock exchange approvals; (iii) the completion of the Concurrent Financing for minimum gross proceeds of $3,000,000, (iv) the completion of the Debt Settlement, (v) conditional approval of the CSE for the listing of the Purchaser Shares, including the Purchaser Shares to be issued in connection with the Transaction and the Debt Settlement, and (vi) other standard closing conditions for a transaction of this nature.