Mineros consolidates 100% of Luna Roja project, Nicaragua

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Medellín, Colombia - 16 de diciembre de 2020

MINEROS CONSOLIDATES 100% OF LUNA ROJA PROJECT, NICARAGUA

Mineros S.A. (MINEROS:CB) (“Mineros”) is pleased to announce that it has entered into a binding letter agreement (the “Letter Agreement”) with Royal Road Minerals Limited (“Royal Road”) to acquire (the “Transaction”) Royal Road’s 50% interest in the Luna Roja Project, comprising of the Monte Carmelo I and Monte Carmelo II mining concessions in Nicaragua. The Luna Roja Project is currently jointly owned and operated by Royal Road and Hemco-Nicaragua S.A., a wholly owned subsidiary of Mineros, pursuant to the terms of a strategic alliance agreement (the “Strategic Alliance Agreement”) dated September 1, 2017. Following the completion of the Transaction, Mineros would indirectly own 100% of the Luna Roja Project.

“This transaction consolidates our interest in an asset we see significant potential in. Luna Roja also benefits from being proximal to our HEMCO hub, which should enable synergy capture and the project de-risking process to commence in earnest. Further exploration as well as a maiden resource is planned for 2021 at Luna Roja and the strategic alliance plans to ramp up exploration efforts on Caribe, where recent exploration is showing promising results” said Eduardo Flores Zelaya, VP of Business Development and Strategy.

“Luna Roja demonstrates proof of concept in our decision to partner with an experienced exploration group in Royal Road to unlock value from the large scale land holding Mineros has in Nicaragua. The exploration potential we see within the Golden Triangle in Nicaragua, which has recently attracted the interest of a major mining company, forms an integral part of our long-term organic growth strategy. We look forward to continuing our mission and collaborating further with Royal Road” said Andrés Restrepo, CEO of Mineros.

Transaction:

The purchase price payable under the Transaction is comprised of:
(i) US$22.5 million payable in cash on closing, plus
(ii) A 1.25% net smelter royalty on all future mineral production from the Monte Carmelo I and Monte Carmelo II mining concessions commencing from the first production therefrom.


In addition, Royal Road has agreed to invest US$7.5 million over a five year period in exploration joint ventures carried on by Mineros and Royal Road at Nicaragua.

The completion of the Transaction is subject to a number of conditions including the entering into by the parties of a definitive agreement (the “Definitive Agreement”), the prior approval by the boards of directors of each of Mineros and Royal Road of the Definitive Agreement and the completion of due diligence by each of Mineros and Royal Road to each of its reasonable satisfaction regarding technical, legal, financial and tax matters. In addition, the Definitive Agreement is expected to contain customary representations and warranties to be agreed upon and provide for other customary conditions, including the receipt of all required shareholder approval, if any, regulatory approvals, including the approval of the TSX Venture Exchange, and third party consents to the extent required. The Letter Agreement may be terminated by either party if a Definitive Agreement has not been entered into by June 30, 2021; and by either party if any of the conditions precedent to the Definitive Agreement shall have become incapable of fulfilment and shall not have been waived on or before an outside date to be agreed by the parties in the Definitive Agreement.

The Strategic Alliance Agreement will not terminate on the completion of the Transaction and will continue in effect with respect to other projects in Nicaragua operated thereunder including the Caribe Project.

Luna Roja Project:

Luna Roja Project is a gold skarn exploration project is located on the Hemco Property, approximately 26 kilometres southeast of Mineros’ Panama Mine, in the highly prospective Golden Triangle of northeastern Nicaragua, a region characterized by epithermal style gold veins, skarn and porphyry-style mines that have been in operation and produced over 8 million ounces of gold since the early 1900's.


Advisor:

Sprott Capital Partners LP acted as exclusive financial advisor to Mineros in connection with the Transaction.

For further information please contact:
Patricia Ospina C., Director of Investor Relations Mineros S.A.
patricia.ospina@mineros.com.co




About Mineros S.A.
Mineros S.A. is a Colombian company with over 46 years of experience in gold exploration and production, with mining operations and growth projects in each of Colombia, Argentina and Nicaragua and an option to earn an interest in a promising exploration-stage project in Chile. Our material gold operations are the Nechí Alluvial Property in Colombia, the Gualcamayo Mine at the Gualcamayo Property in Argentina and the Panama Mine and the Pioneer Mine at the Hemco Property in Nicaragua. Mineros has worked with the commitment to implement sustainable processes for the best use of minerals, contributing to the preservation of the environment and the diversity, the wellbeing of all stakeholders and economic and social growth of the regions where it is present. Today, these best practices convert Mineros into an important industry benchmark.
More information at: www.mineros.com.co.


Forward-looking Statements
This news release contains "forward-looking information" which may include, but is not limited to, statements with respect to completion of the Luna Roja transaction. Forward-looking statements are based on the opinions and estimates of management as of the date such statements are made and are based on various assumptions. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such factors include, among others, the ability to complete the Luna Roja transaction, receipt of applicable regulatory approvals, general business, economic, competitive, political and social uncertainties; the actual results of exploration activities; changes in project parameters as plans continue to be refined; accidents, labour disputes and other risks of the mining industry, and political instability. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. Forward-looking statements contained herein are made as of the date of this news release and the Company disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or results, except as may be required by applicable securities laws. 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.