South American silver announces $16 million financing with Asian based high technology manufacturers and investors
Tuesday, Apr 17, 2012
South American Silver Corp. (TSX:SAC)(PINKSHEETS:SOHAF) today announced that it proposes to issue approximately 10 million units of the Company, on a committed private placement basis, at a price of $1.60 per Unit (the "Offering"), which represents a 6% premium to the 5 day volume weighted average trading price of the Company's common shares at the time the Toronto Stock Exchange (the "TSX") accepted notice of the transaction. Each Unit consists of one common share of the Company and one-half of one common share purchase warrant of the Company. Each whole warrant will be exercisable to purchase one common share of the Company for a period of 24 months from issuance at a price of $2.00.

The Offering is a strategic investment by a number of Asian based high technology investors, materials manufacturers, and indium/gallium end users from Taiwan, Hong Kong, Japan and Korea. The gross proceeds of the Offering will be approximately $16 million and would go toward the advancement of the Company's Malku Khota silver-indium-gallium project in Bolivia and Escalones copper-gold project in Chile and for general corporate purposes.

Greg Johnson, President & CEO of South American Silver Corp, stated, "This investment is an important step in facilitating the rapid advancement of one of the world's largest silver, indium and gallium projects. These Asian high technology manufacturers and investors see outstanding value and potential in the Company's projects, in particular, the large concentrations of the strategically important metals, indium and gallium, which are critical for their manufacturing of flat panel displays, LED lighting and thin film solar panels, among other applications. An estimated 60-70% of the world's current indium mining and smelting production supply is in mainland China. The Malku Khota project is anticipated to become an important new, long life, low cost, Western source of these metals. "

Mr. Johnson added, "There have been a number of new Asian investments in Bolivia, a country with vast mineral potential, and this complements the recently announced heads of state agreements between the government of Bolivia with China and South Korea to develop other high technology metals projects. With Malku Khota targeted to produce 10% or more of the global indium and gallium supply, the Company may review possible indium/gallium off-take or streaming-type opportunities as a source of project financing after completion of Pre-feasibility studies on the project."

Completion of the Offering will close upon receipt of regulatory approvals and is anticipated to be on or about 20 April 2012. The securities to be issued pursuant to the Offering will be subject to a four-month restricted resale period from the closing date. The Company shall be entitled to accelerate the exercise period of the Warrants, in the event that the common shares of the Company trade on the TSX at a price not less than $2.50 for a period of 10 consecutive trading days, to an exercise period ending at least 30 days from the date notice of such acceleration is provided to the Warrant holders.

Source: Marketwire

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