TORONTO,
March 4, 2022 /CNW/ - Magna Gold
Corp. (TSXV: MGR) (OTCQB: MGLQF) ("Magna" or the "Company"),
announces that it has entered into an amending agreement (the
"Amending Agreement") in respect of the secured promissory note and
guaranty dated February 11, 2021 (as
first amended on September 21, 2021,
the "Note") previously issued by Magna's subsidiary, Molimentales
del Noroeste, S.A. ("Molimentales"), in favour of Auramet
International LLC (the "Lender"), an arm's length third party. The
amendments to the Note provide for, among other things, the
disbursement to Molimentales of an additional US$2,000,000 loan from the Lender, which will be
governed pursuant to the terms of the amended Note (the "New Loan"
and together with the US$2,000,000 in
principal amount previously outstanding under the original Note,
the "Loan"). The proceeds of the New Loan are expected to be
used for general working capital and other business and operational
needs of the Company and its subsidiaries.
In consideration of the Lender's agreement to
advance the New Loan, the Company has agreed to issue to the Lender
1,500,000 non-transferable common share purchase warrants of the
Company (the "Bonus Warrants"). Each Bonus Warrant is exercisable
into one common share of the Company for a period of one year
following the date of issuance at an exercise price of C$0.78 per share. The issuance of the Bonus
Warrants remains subject to the approval of the TSX Venture
Exchange (the "Exchange"). Further, the Bonus Warrants, and any
shares issued on exercise thereof, will be subject to a hold period
expiring four months and a day following the date of issuance.
Pursuant to the terms of the amended Note, the
Loan will be paid and satisfied by the delivery to the Lender,
commencing on July 29, 2022, of an
aggregate of 2,586 ounces of gold (at a gold price of US$1,816.80 per ounce) in six equal monthly
instalments. Further, pursuant to the terms of the amended Note,
the Loan will not bear any interest, until such time as there
occurs an event of default in which case, the Lender may, upon
notice, cause the principal amount outstanding under the Loan to
bear interest at a rate equal to the lower of 18% per annum and the
highest rate permitted by applicable law. The obligations of
Molimentales under the amended Note are guaranteed by the Company
and its subsidiary, Minera Magna S.A. de C.V. ("Minera Magna"), and
are secured by a pledge, in favour of the Lender, of certain
securities of Molimentales and Minera
Magna held by the Company.
ON BEHALF OF THE BOARD OF DIRECTORS
Arturo
Bonillas
President and CEO
Neither the TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in policies
of the TSX Venture Exchange) accepts responsibility for the
adequacy or accuracy of this release.
Cautionary Statements
This news release includes certain
"forward-looking statements" which are not comprised of historical
facts. Forward-looking statements include estimates and statements
that describe the Company's future plans, objectives or goals,
including words to the effect that the Company or management
expects a stated condition or result to occur. Forward-looking
statements may be identified by such terms as "believes",
"anticipates", "expects", "estimates", "may", "could", "would",
"will", or "plans". Since forward-looking statements are based on
assumptions and address future events and conditions, by their very
nature they involve inherent risks and uncertainties. Although
these statements are based on information currently available to
the Company, the Company provides no assurance that actual results
will meet management's expectations. Risks, uncertainties and other
factors involved with forward-looking information could cause
actual events, results, performance, prospects and opportunities to
differ materially from those expressed or implied by such
forward-looking information. Forward-looking information in this
news release includes, but is not limited to, statements with
respect to (i) the Company's objectives, goals or future
expectations (including, with respect to the use of the proceeds of
the New Loan), (ii) the approval by the Exchange of the Bonus
Warrants, and the issuance thereof, (iii) completion of the
transactions contemplated herein (including, the approval of the
Exchange of the said transactions), and (iv) the anticipated future
payment obligations of the Company and/or its subsidiaries pursuant
to the terms of the Note, as amended. These forward-looking
statements are based on current expectations, and are naturally
subject to uncertainty and changes in circumstances that may cause
actual results to differ materially. Factors that could cause
actual results to differ materially from such forward-looking
information include, but are not limited to failure to identify
mineral resources, failure to convert estimated mineral resources
to reserves, the inability to complete a feasibility study which
recommends a production decision, the preliminary nature of
metallurgical test results, delays in obtaining or failures to
obtain required governmental, environmental or other project
approvals, political risks, uncertainties relating to the
availability and costs of financing needed in the future, changes
in equity markets, inflation, changes in exchange rates,
fluctuations in commodity prices, delays in the development of
projects, capital, operating and reclamation costs varying
significantly from estimates and the other risks involved in the
mineral exploration and development industry, risks
related to the effects of COVID-19 on the Company; and those
risks set out in the Company's public documents filed on SEDAR.
Although the Company believes that the assumptions and factors used
in preparing the forward-looking information in this news release
are reasonable, undue reliance should not be placed on such
information, which only applies as of the date of this news
release, and no assurance can be given that such events will occur
in the disclosed time frames or at all. The Company disclaims any
intention or obligation to update or revise any forward-looking
information, whether as a result of new information, future events
or otherwise, other than as required by law.
View original content to download
multimedia:https://www.prnewswire.com/news-releases/magna-gold-amends-loan-agreement-with-auramet-international-llc-301496117.html
SOURCE Magna Gold Corp.