Telson Resources Inc. (Telson or the Company) (TSXV:TSN) is very pleased to announce it has entered into a Loan Facility and Offtake Agreements (the Agreements) with Trafigura Mexico S.A. de C.V. (Trafigura), a market leader in the global commodities industry, to sell 100% of the lead and zinc concentrate produced at the Campo Morado Mine from the commencement of commercial production estimated during October 2017 and until December 2021. Trafigura has provided Telson with a credit facility of US$5 million thereby securing full working capital requirements to initiate the restart of continuous mining operations at the Campo Morado Mine.

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Key Terms:

US$5 Million Loan Facility

  • US$5 million received in Telson’s bank account on September 15, 2017- Three-year term with six-month grace period followed with 30 repayment installments.

    Loan Facility Matures on September 2020 andbears interest atrate equal to LIBOR (3M) +5%

    No hedging conditions

    No equity based payments
Offtake Agreement

  • 51-month term ending December 2021 for Campo Morado Pb and Zn concentrate production- Fixed minimum tonnage to be sent during the offtake term

    Very Competitive industry payable metal terms at LME and LBMA Spot prices

    Access to prompt payments 5 days after delivery, providing excellent liquidity to the operation

    Competitive transport charges

Telson has provided industry standard security to Trafigura in the form of a corporate guarantee, a promissory note plus a pledge of the shares of Telson 100% owned subsidiary company Nyrstar Campo Morado, S.A. de C.V. Theextent of Telson’s liability to Trafigura within the Agreements under Mexican law is limited to the amount of the offtake loan plus interest.

Antonio Berlanga, CEO of Telson, states We are very happy to be able to deliver to our shareholders this exciting key milestone which has secured Telson not only the US$5 million working capital we were seeking allowing Telson to commence full mining operations at Campo Morado but also, very good concentrate