Kuya Silver Announces Closing of Additional Convertible Financing

Rhea-AI Summary

Kuya Silver (CSE: KUYA) (OTCQB: KUYAF) has closed a second tranche of convertible financing. The company issued an additional unit comprising a secured convertible debenture worth CAD$436,500 (face value CAD$485,000) and 560,595 warrants exercisable at CAD$0.37 until June 5, 2027.

The debenture includes a 10% original issue discount and matures in 15 months with an 8% annual interest rate. The principal amount is convertible into common shares at the previous day's closing price. The company can repay early at 110% of principal plus interest, with the investor able to exclude up to one-third from early repayment. The proceeds will fund mining operations at the Bethania Project, Peru, and working capital.

Currently, the total remaining loan principal on the debentures is $836,500.

Positive

• Secured additional working capital of CAD$436,500 for mining operations
• Flexibility to repay debenture in cash or shares

Negative

• 8% annual interest rate adds to debt servicing costs
• 10% original issue discount reduces effective capital raised
• Potential dilution for shareholders through conversion to common shares
• Additional debt burden with $836,500 total loan principal outstanding

News Market Reaction

-3.93%

1 alert

-3.93% News Effect

On the day this news was published, KUYAF declined 3.93%, reflecting a moderate negative market reaction.

Data tracked by StockTitan Argus on the day of publication.

Toronto, Ontario--(Newsfile Corp. - December 6, 2024) - Kuya Silver Corporation (CSE: KUYA) (OTCQB: KUYAF) (FSE: 6MR1) (the "Company" or "Kuya Silver") announces it has closed a second tranche in connection with a convertible financing agreement (the "Agreement") with an investor (the "Investor") as disclosed in its press releases of October 1, 2024 and October 10, 2024. Under the terms of the Agreement, the Investor subscribed for, and the Company issued, an additional unit ("Additional Unit") comprised of a secured convertible debenture of the Company in the principal amount of CAD$436,500 (face value of CAD$485,000) (the "Additional Debenture") and 560,595 common share purchase warrants of the Company (each a "Warrant") exercisable at CAD$0.37 until June 5, 2027. The Additional Debenture includes an original issue discount of 10% in favour of the Investor. The Company received net proceeds of CAD$436,500, less a 2% transaction fee to the Investor and applicable closing costs.

The Additional Debenture, matures 15 months from the date of issuance and bears an annualized interest rate of 8% calculated daily and paid quarterly in cash or in common shares of the Company (each a "Common Share"), at the option of the Company. At the option of the Investor, the principal amount of Additional Debenture (up to a maximum of $436,500), together with accrued interest on such principal amount, is convertible into Common Shares of the Company at a conversion price equal to the closing price of the Common Shares on the CSE on the day prior to the conversion. The Company may elect to repay all or part of the Additional Debenture prior to the maturity date at an amount equal to 110% of the principal amount, plus accrued interest and interest to the end of the quarter in which the repayment was made. Upon receipt of a notice of repayment, the Investor shall have the option to exclude up to one-third of the then outstanding principal amount of the Additional Debenture from such early repayment. The securities underlying the Additional Unit will not be subject to any statutory hold period under applicable Canadian securities laws. The proceeds of the financing will be used for mining operations at the Bethania Project, Peru and general working capital.

Subsequent to the disclosure in the Company's Interim Consolidated Financial Statements for the period ended September 30, 2024, an additional $200,000 of the debenture issued October 9, 2024 was converted into Common Shares and, separately, the Company repaid $48,500 in cash against the Additional Debenture. At the present time, the total loan principal remaining on the debentures relating to the Agreement is $836,500.

About Kuya Silver Corporation

Kuya Silver is a Canadian‐based, growth-oriented mining company with a focus on silver. Kuya Silver operates the Bethania silver mine in Peru, while developing district-scale silver projects in mining-friendly jurisdictions including Peru and Canada.

For more information, please contact:

David Stein, President and Chief Executive Officer
Telephone: (604) 398‐4493
info@kuyasilver.com
www.kuyasilver.com

Reader Advisory

This news release contains statements that constitute "forward-looking information," including statements regarding the plans, intentions, beliefs, and current expectations of the Company, its directors, or its officers with respect to the future business activities of the Company. The words "may," "would," "could," "will," "intend," "plan," "anticipate," "believe," "estimate," "expect," "must," "next," "propose," "new," "potential," "prospective," "target," "future," "verge," "favourable," "implications," and "ongoing," and similar expressions, as they relate to the Company or its management, are intended to identify such forward-looking information. Without limiting the generality of the foregoing statements, any discussion regarding the proposed use of the proceeds of the financing and the Company's business operations, is forward-looking information. Investors are cautioned that statements including forward-looking information are not guarantees of future business activities and involve risks and uncertainties, and that the Company's future business activities may differ materially from those described in the forward-looking information as a result of various factors, including but not limited to fluctuations in market prices, successes of the operations of the Company, continued availability of capital and financing, and general economic, market, and business conditions. There can be no assurances that such forward-looking information will prove accurate, and therefore, readers are advised to rely on their own evaluation of the risks and uncertainties. The Company does not assume any obligation to update any forward-looking information except as required under the applicable securities laws.

Neither the CSE nor the Canadian Investment Regulatory Organization of Canada accepts responsibility for the adequacy or accuracy of this release.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/232894

FAQ

What is the value of Kuya Silver's (KUYAF) latest convertible debenture?

Kuya Silver's latest convertible debenture has a principal amount of CAD$436,500 with a face value of CAD$485,000.

What is the interest rate and maturity period for Kuya Silver's (KUYAF) December 2024 convertible debenture?

The convertible debenture has an 8% annual interest rate and matures in 15 months from the issuance date.

How many warrants were issued with Kuya Silver's (KUYAF) December 2024 convertible financing?

560,595 common share purchase warrants were issued, exercisable at CAD$0.37 until June 5, 2027.