Denarius Silver Announces Closing of Subscription Receipt Private Placement Financing

VANCOUVER, BC, March 17, 2021 /CNW/ - Denarius Silver Corp. ("Denarius Silver" or the "Company") (TSXV: DSLV), is pleased to announce the closing of the non-brokered private placement (the "Financing") of 75,000,000 subscription receipts (the "Subscription Receipts") at $0.45 per receipt for aggregate gross proceeds of $33,750,000. As previously announced on February 25, 2021, the Financing is a condition to the Company acquiring a 100% indirect interest in the Investigation Permit Nº 14,977 (also identified as the Rubia permit) covering the areas occupied by the former Lomero-Poyatos Concessions and the mine within them (the "Lomero Project") in southern Spain (the "Transaction").

The proceeds of the Financing will be held in escrow pending the Company receiving all applicable regulatory approvals and completing the Transaction. Upon satisfaction of the escrow release conditions, immediately prior to completion of the Transaction, each subscription receipt will automatically convert into one unit (each, a "Unit") of the Company for no additional consideration. Each Unit shall be comprised of one common share (each, a "Share") and one Share purchase warrant (each, a "Warrant"). Each Warrant shall be exercisable into one Share at a price of $0.80 per Share until March 17, 2026. The Company intends to apply to the TSX Venture Exchange (the "Exchange") to list the Warrants issued in connection with the Financing; however, there is no guarantee that the Exchange will approve said listing. The Subscription Receipts, and the Shares and Warrants issuable upon conversion, are subject to a hold period until July 18, 2021 in accordance with applicable securities law. If the Transaction is not completed on or before April 30, 2021, the proceeds of the Financing will be returned to the subscribers.

The Company expects to pay finder's fees (the "Finder's Fees") of 6% to certain arms-length parties who have introduced subscribers to the Financing, totalling approximately $409,035, of which $361,665 will be paid in Units of the Company, in accordance with the policies of the Exchange.  It is expected that proceeds from the Financing will be utilized to make the Transaction payments, undertake an exploration and development program on the Lomero Project and for the general and administrative expenses of the Company.

Gran Colombia Gold Corp. ("Gran Colombia") has invested $10 million in the Financing. Prior to completion of the Financing, Gran Colombia held, directly or indirectly, or exercised control or direction over, 33,666,666 Shares of the Company, representing approximately 36.15% of the issued and outstanding shares of the Company. Upon conversion of the Subscription Receipts into Units of the Company, Gran Colombia will own 55,888,889 Shares of the Company and 22,222,223 common share purchase warrants, representing approximately 27.31% of outstanding securities of the Company on an undiluted basis, assuming conversion of all of the Subscription Receipts issued in connection with the Financing and completion of all share issuances necessary in connection with completion of the Transaction.

KSAC Europe Investements S.à.r.L., a wholly-owned subsidiary of King Street Capital, L.P., King Street Capital, Ltd. and King Street Europe, Ltd., all of which funds are managed by King Street Capital Management, L.P. and ultimately under the control and direction of Mr. Brian Higgins ("King Street"), invested $15 million in the Financing. King Street's address in New York is 299 Park Avenue, 40^th Floor, New York, NY, 10171.  King Street did not own any common shares in the Company prior to completion of the Financing.  The Subscription Receipts were acquired by King Street for investment purposes, but King Street may acquire or dispose of securities of the Company in the future for investment purposes of for other reasons, depending on market conditions and other factors.  Upon conversion of the Subscription Receipts into Units of the Company, King Street will own 33,333,334 Shares and 33,333,334 Warrants, exercisable to acquire an additional 33,333,334 Shares.  As a result, King Street is deemed to beneficially own 66,666,668 of the 159,784,583 Shares of the Company that would be outstanding after giving effect to all rights of King Street to acquire securities of the Company exercisable within 60 days, whether or not on conditions, representing approximately 41.72% of the outstanding securities on a partially-diluted basis, assuming the conversion of only the Subscription Receipts held by King Street and without giving effect to the Transaction.  Assuming conversion of all of the Subscription Receipts issued in connection with the Financing and completion of all share issuances necessary in connection with completion of the Transaction, but without giving effect to the exercise of any Warrants, King Street will own 33,333,334 Shares representing approximately 16.29% of the outstanding common shares of the Company.

The Company has obtained disinterested shareholder approval, referred to in the February 25, 2021 news release.

In satisfaction of the requirements of National Instrument 62-104 - Take-Over Bids and Issuer Bids and National Instrument 62-103 - The Early Warning System and Related Take-Over Bid and Insider Reporting Issues, each of Gran Colombia and King Street will be filing an early warning report respecting the acquisition of their respective securities, containing additional information omitted from this news release,  under Denarius Silver's SEDAR Profile at www.sedar.com.  A copy of the report filed by Gran Colombia may be obtained from Amanda Fullerton, Corporate Secretary, telephone number [phone], and a copy of the report filed by King Street may be obtained from Randy Stuzin, General Counsel, telephone number [phone].

Gran Colombia and King Street each acquired the securities for investment purposes only, and depending on market and other conditions, may from time to time in the future increase or decrease their ownership, control or direction over securities of the Company, through market transactions, private agreements, or otherwise.

Following the closing of the Transaction and the Financing, the Company expects to have approximately 204,621,615 common shares issued and outstanding on an undiluted basis.

On Behalf of the Board of Directors,

DENARIUS SILVER CORP. 

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. 

Statements included in this announcement, including statements concerning our plans, intentions and expectations, which are not historical in nature are intended to be, and are hereby identified as, "forward–looking statements". Forward–looking statements may be identified by words including "anticipates", "believes", "intends", "estimates", "expects" and similar expressions. The Company cautions readers that forward–looking statements, including without limitation those relating to the Company's future operations and business prospects, completion of the Transaction and use of proceeds from the Financing are subject to certain risks and uncertainties that could cause actual results to differ materially from those indicated in the forward–looking statements.

SOURCE Denarius Silver Corp.

Serafino Iacono, Executive Chairman, Phone: [phone], Email: [email protected], Website: www.denariussilver.com

Related Links

www.denariussilver.com