TriMetals Mining to Receive US$ 25.8 Million from Bolivia
Vancouver, British Columbia - August 29, 2019
TriMetals Mining Inc. (TSX: TMI and TMI.B, OTCQB: TMIAF and TMIBF) (the “Company” or “TMI”) announces that today TMI and its wholly-owned subsidiaries South American Silver Limited (“SASL” or the “Claimant”) and Compania Minera Malku Khota S.A., have entered into an agreement (the “Settlement Agreement”) with the Government of the Plurinational State of Bolivia (“Bolivia”) to settle SASL’s international arbitration against Bolivia for the 2012 expropriation of the Malku Khota project, and to transfer to Bolivia the exploration data of the Malku Khota project owned by the Company (the “Data”).
On November 22, 2018, the Arbitral Tribunal of the Permanent Court of Arbitration issued an award (the “Award”), (see press release dated November 23, 2018), ordering Bolivia to provide compensation to SASL in the amount of US$18.7 million (the “Compensation”) and to pay interest thereon running from August 1, 2012 to the date of payment of the Compensation.
To avoid the time and expense of pursuing enforcement proceedings to collect the Award, which the Company and the third party funder of the arbitration (the “Fund”) agreed could take years with no guarantee of outcome, the Company and the Fund decided to initiate discussions with Bolivia with the view to obtaining a prompt settlement. From the first meeting with Bolivia, and during the meetings that ensued, it became known to the Company that prompt settlement would not be possible if the Company did not agree to transfer the Data to Bolivia as, for Bolivia, the Data was crucial to facilitate the further development of the project. The Company determined it was in its best interest to reach a prompt settlement with Bolivia by transferring its Data and by accepting a discount to the amount payable to the Claimant pursuant to the Award.
Pursuant to the Settlement Agreement, Bolivia has agreed to pay US$25,798,000 to the Company as a final settlement amount on or before September 5, 2019 and the Company agreed to transfer the Data to Bolivia. Bolivia will deduct $209,475 from the amount payable in satisfaction of the Tribunal’s cost order included in the Award. The Company expects to recover the US$209,475 from the Fund, as it relates to costs and expenses of the arbitration payable by the Fund.
Once paid, the Company will cease all legal activities related to the collection of the Award.
Matias Herrero, President & CEO of TMI commented, “Reaching a settlement with Bolivia and concluding the arbitration dispute is an important milestone for the Company and our shareholders. All efforts and attention can now be focused on growing and creating value for the Company, by exploring and further developing the mineral resources at the historic Gold Springs project in southern Utah and Nevada, both, top-ten mining jurisdictions in the world”.
After taking into account the costs and expenses of the international arbitration proceedings (the “Malku Khota Arbitration Expenses”) which include the amount payable to the Fund pursuant to the terms of the litigation funding agreement, the reimbursement to the Company for arbitration expenses paid by it that were not covered by the Fund and the value of the Company’s Data transferred to Bolivia, the total redemption price of the Class B shares (the “Class B Shares Total Entitlement”) is approximately US$11.36 million. The amount to be reimbursed has not yet been finally determined as the Company is still receiving final invoices, but any changes are not expected to be material.
The Company has 60 days from the date of payment by Bolivia to redeem all 116,375,152 Class B shares outstanding. In the upcoming weeks, the Company will notify its Class B shareholders, their agents and/or brokers, about the procedure to redeem the Class B shares.
Following redemption of the Class B Shares and repayment of the Credit Facility (see press release of April 5, 2019), the Company will be debt free and expects to have approximately US$ 5 million of free available cash to fund exploration and development activities at the Gold Springs project and for general corporate costs.
About TriMetals Mining Inc.
TriMetals Mining Inc. (TSX: TMI and TMI.B, OTCQB: TMIAF and TMIBF) is a growth-focused gold exploration company creating value through the exploration and development of the near-surface Gold Springs gold-silver project in mining-friendly Nevada and Utah, U.S.A.
The Company’s Class B shares are listed on the Toronto Stock Exchange under the stock symbol “TMI.B” and on the OTCQB under the stock symbol TMIBF and have no interest in the properties or assets of the Company other than the collective entitlement to 85% of the net cash, if any (after deducting all costs, taxes and expenses and the amount due to a third party that funded the costs of the arbitration), received by the Company from an award or settlement in relation to South American Silver’s arbitration proceeding against Bolivia for the expropriation of the Malku Khota project in 2012.
TriMetals Mining Inc. Contact:
Chief Executive Officer
Certain statements contained herein constitute “forward-looking information” under applicable Canadian securities laws (“forward-looking statements”). Forward-looking statements look into the future and provide an opinion as to the effect of certain events and trends on the business. Forward-looking statements may include words such as “would”, “will”, “expect” and similar expressions. The amount of the Class B Shares Total Entitlement, the Company’s expectation to be debt-free and its expectation of the amount of free available cash to be available to it each constitutes a forward-looking statement. These forward-looking statements are based on current expectations and entail various risks and uncertainties. Actual results may materially differ from expectations if known and unknown risks or uncertainties affect our business or if our estimates or assumptions prove inaccurate. Factors that could cause results or events to differ materially from current expectations expressed or implied by the forward-looking statements, include, but are not limited to, Bolivia not paying the settlement amount by September 5, 2019, and other risks more fully described in the Company’s Annual Information Form and continuous disclosure documents, which are available on SEDAR at www.sedar.com.
Readers are cautioned not to place undue reliance on the forward-looking statements contained in this press release. Except as required by law, the Company assumes no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or any other reason. Unless otherwise indicated, forward-looking statements in this press release describe the Company’s expectations as of the date hereof.
 Fraser Institute’s most recent annual survey of mining companies published on February 28, 2019.