Vancouver, British Columbia--(Newsfile Corp. - May 22, 2018) - Xiana Mining Inc. (TSXV: XIA) ("Xiana" or the
"Company") is pleased to announce that it has entered into a definitive agreement (the "MAP Agreement") with
subsidiaries of Glencore plc ("Glencore") to acquire 100% of Minera Altos De Punitaqui ("MAP"), a producing
copper-gold operation in Chile, (the "MAP Acquisition").
Commenting on the MAP Acquisition, Carlos Ballon, Chairman & CEO said: "MAP is an excellent cornerstone asset for
Xiana which combines an existing copper and gold production base with significant upside potential. The Xiana team has a track
record of development and exploration successes and we are excited by the geological potential of MAP. We look forward to building
upon MAP's potential and enhancing shareholder value through organic growth and further acquisitions in Chile & Peru."
Overview of MAP
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MAP is a producing copper-gold operation located in Region IV of Chile
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The operations are located ~400km north of Santiago and 35km south of Ovalle in the Coquimbo region. They benefit from water
and power supply and excellent infrastructure
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The operations are in an established mining district with over 90% of employees from Punitaqui or Ovalle
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MAP has a 3,600 tpd concentrator on site, currently processing ore from 3 mines (open pit and underground)
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2017 Production comprised ~8kt of copper metal and 21koz of gold (in concentrate)
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The properties comprise of IOCG, vein and Mantos style of mineralisation and are located in a prolific copper-gold
district
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Current mine life of +5 years with significant upside potential to create a long life, sustainable medium sized copper
producer
MAP Acquisition Agreement Summary
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Xiana and Xiana Chile SPA (a wholly-owned subsidiary of Xiana) signed the MAP Agreement on May 18, 2018, to acquire the 100%
interest in MAP pursuant to an arm's length transaction with Glencore
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Xiana has agreed, pursuant to the terms of the MAP Agreement, to pay Glencore total cash consideration of US$25 million and
to grant a net smelter royalty payable as follows:
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No finder's fees are payable to any person in connection with the MAP Acquisition
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Closing of the MAP Acquisition is subject to the receipt of various customary regulatory approvals, including approval of
the TSX Venture Exchange (the "TSXV"). If the Closing of the MAP Acquisition has not occurred on or by September 30,
2018, either party may elect to terminate the Agreement
Concurrent Financing
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Concurrently with the MAP Acquisition, Xiana will be conducting a financing for gross proceeds of up to C$10 million (the
"Placement") through the issuance of units in the Company (each an "Equity Unit") at a price of C$0.48 per Equity
Unit. Each Equity Unit will be comprised of one common share in the capital of the Company (a "Common Share") and one
Common Share purchase warrant (a "Warrant"). Each Warrant will be exercisable to purchase one Common Share at a price of
C$0.75 per Common Share for a period of five years from the date of issuance of the Warrant
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Xiana's existing shareholder, Tembo Capital Mining Fund GP LP ("Tembo"), has confirmed its continued support for
Xiana and agreed to subscribe for C$3.8 million of Equity Units as part of the Placement
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In addition to the Placement, Tembo has agreed to advance to the Company a secured convertible loan facility in the
principal amount of C$9 million (the "Loan", and together with the Placement, the "Concurrent Financing"). The
Loan will be evidenced by a definitive agreement to be entered into by Tembo and Xiana (the "Loan Agreement") which will
contain customary covenants, representations and warranties, events of default and conditions precedent
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The Loan will be convertible, at the election of Tembo, into units of the Company ("Loan Unit") at a conversion price
of C$0.60 per Loan Unit. Each Loan Unit will be comprised of one Common Share and one Common Share purchase warrant (an
"Underlying Warrant"). Each Underlying Warrant will be exercisable to purchase one Common Share at a price of C$0.75 per
Common Share for a period of five years from the date of the Loan Agreement.
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C$$645, 000 of the loan amount will be available for drawdown upon execution of the Loan Agreement. The remainder of the
C$8.4 million loan amount will be available for drawdown concurrent with the closing of the MAP Acquisition (the "Drawdown
Date")
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The Loan shall be repayable on the date that is 18 months from Drawdown Date.
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The Loan will carry an interest rate of 10% per annum for the first year and thereafter 12% per annum (inclusive of funding
costs), payable semi-annually. Interest on the Loan will be payable in cash or in Common Shares, subject to TSXV approval, or
at the election of Tembo such interest may be added to the outstanding loan balance. Interest payments which are payable in
Common Shares shall be based on the current market price of the Common Shares at the time such interest is payable which will
be calculated based on the 20 day volume weighted average price per Common Share immediately prior to the date such interest is
payable
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The Loan will be secured by a pledge over the shares of Xiana Chile SPA and the intercompany loans held by Xiana's
subsidiaries (to the extent relevant)
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In connection with providing the Loan, Tembo will be entitled to receive an arrangement fee equal to 3% of the amount of the
Loan payable in cash
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Following completion of Placement, Tembo's stake in Xiana will increase to 21% of the Company (before conversion of the Loan
or exercise of any warrants issued in connection with the Concurrent Financing).
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The proceeds from the Concurrent Financing will be utilised for purposes of completing the MAP Acquisition (including
payment of the consideration due at Closing and the transaction costs), funding required for MAP in respect of asset
optimisation, conducting development and exploration activities and general corporate overhead expenses
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Carlos Ballon and Tembo have each undertaken to enter into customary lock-up arrangements in respect of their holdings in
the Company for a period of 24 months from the date of closing of the Concurrent Financing
Commenting on the Concurrent Financing, Carlos Ballon, Chairman & CEO said: "We are delighted to have Tembo as our
cornerstone investor and a continuing supporter of Xiana. The Concurrent Financing enables Xiana to
complete the MAP Acquisition and move forward on a strong financial footing to deliver value from the transaction. We look
forward to working with the team on the execution of our strategy."
Additional Items
The Concurrent Financing is integral to the proposed MAP Acquisition and therefore the Company expects to rely on the "part and
parcel pricing exemption" allowed by the TSXV policies. Completion of the MAP Acquisition and the Concurrent Financing are expected
to occur during the third quarter of 2018 and are subject to satisfaction of a number of customary conditions precedent, including,
without limitation, obtaining shareholder approval of the Concurrent Financing and the resulting creation of a new control person,
the acceptance of the TSXV and the satisfaction of any conditions which the TSXV may impose.
All securities issued under the Concurrent Financing will be subject to a hold period of four months and a day from the date of
issuance under applicable securities laws.
NRG Capital Partners is acting as Financial Adviser to Xiana.
Fasken Martineau LLP and Baker Mackenzie are acting as legal counsel to Xiana in relation to the MAP Acquisition.
McCarthy Tétrault LLP is acting as legal counsel to Xiana in relation to the Concurrent Financing.
Qualified Person
The technical information contained in this news release has been reviewed and approved by Robert Baxter (FAusIMM), a Director
of Xiana Mining Inc. and a qualified person as defined by National Instrument 43-101. Mr. Baxter is not independent of the
Company.
About Xiana Mining Inc.
Xiana Mining Inc. is a mineral exploration and development company focused on acquiring and developing mining assets in Peru and
Chile.
ON BEHALF OF THE BOARD OF DIRECTORS OF
XIANA MINING INC.
Carlos Ballon
Carlos Ballon, Chairman & CEO
For further information please contact:
Tony Drescher (Chief Financial Officer)
Telephone: +1 (604) 685-1017
E-mail: ajd@harbourpacific.com
Rita Adiani
NRG Capital Partners
Telephone: +44 (0)203 709 4504
E-mail: rita.adiani@nrgcapitalpartners.com
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.
Forward Looking Statements
This press release contains forward looking statements within the meaning of applicable Canadian securities legislation,
which includes without limitation statements concerning completion of the MAP Acquisition and the Concurrent Financing. Although
Xiana believes that the expectations reflected in these forward looking statements are reasonable, undue reliance should not be
placed on them because Xiana can give no assurance that they will prove to be correct. Since forward looking statements address
future events and conditions, by their very nature they involve inherent risks and uncertainties. The MAP Acquisition and
the Concurrent Financing may not be completed if required approvals or some other condition to closing is not satisfied. The
closing of the MAP Acquisition and the Concurrent Financing could be delayed if Xiana is not able to obtain the necessary
regulatory and stock exchange approvals on the timelines it has planned. The MAP Acquisition and the Concurrent Financing
will not be completed at all if these approvals are not obtained or some other condition to the closing is not satisfied.
Accordingly, there is a risk that the MAP Acquisition and the Concurrent Financing will not be completed within the
anticipated time or at all. There is 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 forward looking statements.
Accordingly, readers should not place undue reliance on forward looking statements. The forward looking statements
contained in this press release are made as of the date hereof and Xiana undertakes no obligations to update publicly or revise any
forward looking statements or information, whether as a result of new information, future events or otherwise, unless so required
by applicable securities laws.
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