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Toronto, Ontario--(Newsfile Corp. - October 1, 2024) - Kuya Silver Corporation (CSE: KUYA) (OTCQB: KUYAF) (FSE: 6MR1) (the "Company" or "Kuya Silver") is pleased to announce that it has agreed upon the terms upon which it proposes to enter into a definitive convertible financing agreement (the "Agreement") with L1 Capital Global Opportunities Master Fund (the "Investor"). Under the terms of the Agreement, the Investor will subscribe for, and the Company will issue, a unit ("Unit") comprised of a secured convertible debenture of the Company (the "Debenture") and a number of common share purchase warrants of the Company (each a "Warrant"). The Debenture will be issued in the principal amount CAD $1,111,111 and includes an original issue discount of 10% in favour of the Investor. The Company will receive net proceeds of CAD $1,000,000, less a 2% transaction fee to the Investor and applicable closing costs. The number of Warrants comprising the Unit shall be equal to the principal amount of the Debenture divided by the 10-day volume weighted average trading price ("VWAP") of the common shares of the Company (each a "Common Share") prior to the issuance of the Unit, multiplied by 33%. Each Warrant may be exercised to acquire a Common Share for a period of 30 months from the date of issuance. The exercise price of the Warrants will be equal to 130% of the closing price of the Common Shares on the Canadian Securities Exchange (the "CSE") on the day prior to the date of issuance of the Warrants. The net proceeds of the financing will provide additional financial flexibility as the Company ramps up its silver mining operations at the Bethania Project, Peru.
David Stein, Kuya Silver's President and CEO remarked, "Kuya Silver has never been busier, with intensifying production operations at the Bethania project and an active drilling campaign at the Silver Kings project happening simultaneously. The Company is in the enviable position of being able to advance and add value at two high-quality silver projects at the same time. This relatively small additional funding will greatly help the Company manage its working capital as we transition to a growing silver producer, we are very pleased to have a supportive partner for this transaction."
The Agreement also contemplates that, at the option of the Company, and provided at the time that the outstanding principal amount of the Debenture is less than CAD $600,000 and the trading price of the Common Shares is more than CAD $0.25 per share, the Investor shall subscribe for an additional unit ("Additional Unit") comprised of an additional secured convertible debenture of the Company (the "Additional Debenture") and a number of Common Share purchase warrants of the Company (each an "Additional Warrant"). The Additional Debenture comprising the Additional Unit will be issued in the principal amount of CAD $555,555 and, after a 10% original issue discount, the Company would receive net proceeds of CAD $500,000, less a 2% transaction fee to the Investor and applicable closing costs. The number of Additional Warrants comprising the Additional Unit shall also be equal to the principal amount of the Additional Debenture divided by the 10-day VWAP of the Common Shares prior to the issuance of the Additional Unit, multiplied by 33%. Each Additional Warrant may be exercised to acquire a Common Share for a period of 30 months from the date of issuance. The exercise price of the Additional Warrants will be equal to 130% of the closing price of the Common Shares on the CSE on the day prior to the date of issuance of the Additional Warrants. The subscription for the Additional Unit shall be completed on the date that is the later of December 15, 2024, or 100 days after the date of issuance of the Unit.