Fortuna Silver Mines Inc. (NYSE: FSM) (TSX:FVI)
(“Fortuna” or the "Company") today announced that it has entered
into an agreement with a syndicate of underwriters (the
“Underwriters”), co-led by CIBC Capital Markets and Scotiabank, who
have agreed to purchase, on a "bought deal" basis, US$40,000,000
aggregate principal amount of senior subordinated unsecured
convertible debentures (the “Debentures”), at a price of US$1,000
per Debenture (the “Offering”).
The Company has also granted the Underwriters an
over-allotment option to purchase up to an additional US$6,000,000
aggregate principal amount of Debentures at the same price as the
Offering. This over-allotment option is exercisable in whole or in
part, at the sole discretion of the Underwriters, at any time until
and including 30 days following the closing of the Offering.
The Debentures will mature October 31, 2024 (the
“Maturity Date”) and will bear interest at an annual rate of 4.65%
payable semi-annually in arrears on the last day of April and
October in each year, commencing April 30, 2020. At the holder’s
option, the Debentures may be converted into common shares of the
Company (“Common Shares”) at any time prior to the close of
business on the earlier of the last business day immediately
preceding the Maturity Date and the date fixed for redemption. The
conversion price will be US$5.00 per Common Share (the “Conversion
Price”), subject to adjustment in certain circumstances.
The Debentures will not be redeemable by the
Company prior to October 31, 2022. On or after October 31, 2022 and
prior to October 31, 2023, the Debentures may be redeemed in whole
or in part from time to time at the Company’s option at a price
equal to their principal amount plus accrued and unpaid interest,
provided that the volume weighted average trading price of the
Common Shares on the NYSE for the 20 consecutive trading days
ending on the fifth trading day preceding the date on which the
notice of the redemption is given is not less than 125% of the
Conversion Price. On and after October 31, 2023, the Debentures may
be redeemed in whole or in part from time to time at the Company’s
option at a price equal to their principal amount plus accrued and
unpaid interest regardless of the trading price of the Common
Shares.
The Company will use the net proceeds from the
Offering for working capital in relation to the start-up of the
Lindero project and for general working capital purposes.
The Debentures to be issued under the Offering
will be offered by way of a short form prospectus in each of the
provinces of Canada, except Québec, and may be offered in the
United States on a private placement basis pursuant to an exemption
from the registration requirements of the United States Securities
Act of 1933, as amended (the “U.S. Securities Act”), and certain
other jurisdictions.
This news release does not constitute an offer
of securities for sale in the United States. The securities have
not been and will not be registered under the U.S. Securities Act,
and may not be offered or sold in the United States or to a U.S.
person (as defined in Regulation S under the U.S. Securities Act)
absent registration or an applicable exemption from the
registration requirements of the U.S. Securities Act.
The Offering is expected to close on or about
October 2, 2019. Completion of the Offering is subject to certain
conditions, including, without limitation, the receipt of all
necessary regulatory approvals, including the approval of the
Toronto Stock Exchange and the New York Stock Exchange.
About Fortuna
Silver Mines Inc.
Fortuna is a growth oriented, precious metals
producer focused on mining opportunities in Latin America.
Our primary assets are the Caylloma silver Mine in southern Peru,
the San Jose silver-gold Mine in Mexico and the Lindero gold
Project, currently under construction, in Argentina. The
Company is selectively pursuing acquisition opportunities
throughout the Americas and in select other areas. For more
information, please visit our website at www.fortunasilver.com.
ON BEHALF OF THE BOARD
Jorge A. Ganoza President, CEO and
DirectorFortuna Silver Mines Inc.
For further information contact Fortuna Investor
Relations:
Carlos BacaInvestors Relations Manager
T (Peru): +51.1.616.6060, ext. 0E:
info@fortunasilver.com
The Toronto Stock Exchange and the New York
Stock Exchange have not reviewed and do not accept responsibility
for the accuracy or adequacy of this news release, which has been
prepared by management.
Forward Looking Information
This news release contains forward looking
statements which constitute “forward looking information” within
the meaning of applicable Canadian securities legislation and
“forward looking statements” within the meaning of the “safe
harbor” provisions of the Private Securities Litigation Reform Act
of 1995 (collectively, “Forward looking Statements”). All
statements included herein, other than statements of historical
fact, are Forward looking Statements and are subject to a variety
of known and unknown risks and uncertainties which could cause
actual events or results to differ materially from those reflected
in the Forward looking Statements. The Forward looking Statements
in this news release include, without limitation, statements about
the closing of the Offering, the anticipated use of its net
proceeds and the ability to obtain the necessary regulatory
authority and approvals to complete the Offering. Often, but not
always, these Forward looking Statements can be identified by the
use of words such as “estimated”, “potential”, “open”, “future”,
“assumed”, “projected”, “used”, “detailed”, “has been”, “gain”,
“planned”, “reflecting”, “will”, “containing”, “remaining”,
“to be”, or statements that events, “could” or “should” occur or be
achieved and similar expressions, including negative
variations.
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 results, performance or achievements
expressed or implied by the Forward looking Statements. Such
uncertainties and factors include, among others, the closing of the
Offering could be delayed if the Company is not able to obtain the
necessary regulatory approvals on the timelines it has planned; the
Offering may not complete at all if these approvals are not
obtained or some other condition to the closing is not satisfied,
whether the Company’s activities at its properties will
proceed as planned; delays in construction at the Lindero Project;
delays in commissioning of the mine at Lindero; delays in the
commencement of commercial production; changes in general economic
conditions and financial markets; changes in prices for silver,
gold and other metals; technological and operational hazards in
Fortuna’s mining and mine development activities; risks inherent in
mineral exploration; uncertainties inherent in the estimation of
mineral reserves, mineral resources, and metal recoveries;
governmental and other approvals; political unrest or instability
in countries where Fortuna is active; labor relations issues; as
well as those factors discussed under “Risk Factors” in the
Company's Annual Information Form. 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.
The Company believes that the assumptions and
expectations reflected in the forward looking information contained
in this news release are reasonable, but undue reliance should not
be placed on them because the Company can give no assurance that
they will prove to be correct. Since statements in respect of
forward looking information address future events and conditions,
by their very nature they involve inherent risks and uncertainties.
The forward looking information contained in this news release is
made as of the date hereof and the Company undertakes no obligation
to update publicly or revise any forward looking information,
whether as a result of new information, future events or otherwise,
unless so required by applicable securities laws.
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