Esperanza Announces Execution of Definitive Agreements with Pan American Silver

 

 

VANCOUVER - Esperanza Resources Corp. reported that in connection with the previously announced transaction with Pan American Silver Corp. it has entered into a definitive purchase agreement and a subscription agreement. The company previously announced that it had entered into a binding letter agreement with Pan American in respect of the Transaction, pursuant to which, in addition to other terms, the Company will acquire a portfolio of advanced stage gold projects including the La Bolsa project in Mexico, the Pico Machay project in Peru, the Calcatreu project in Argentina and certain related mining claims in the United States in consideration for the Company issuing to Pan American 50,900,000 common shares and 10,000,000 warrants.

The Company has also executed with Pan American the Subscription Agreement in respect of the subscription by Pan American for 20,600,000 common shares of Esperanza at a price of $1.70 per common share for proceeds of $35,020,000.

The parties have agreed to amend the proposed terms of the Warrants to be issued as part of the consideration under the Purchase Agreement to add a callable feature and to amend the exercise price. Each Warrant will now entitle Pan American to purchase one common share of the Company at a price of $1.20 for a period commencing on the closing date of the Transaction and expiring on the fifth anniversary of the Closing. The Warrants will be callable after three years from the Closing if at any time the volume weighted average trading price of the Company's Common Shares on the TSX-V is greater than $1.50 per Common Share for 20 out of the 30 consecutive trading days.

The transactions contemplated by the Initial Definitive Agreements remain subject to the Closing.