CMET Century Metals Inc

Century Metals Inc. (“Century Metals” or the “Company”) (TSXV: CMET). Further to the Company’s news releases of September 24, 2019 and December 31, 2019, the Company provides the following update on its proposed acquisition (the “Acquisition”) of all the issued and outstanding shares of Reyna Silver Corp. (“Reyna Silver”).

Acquisition Terms

As previously disclosed, in conjunction with the Acquisition:

(i) Century Metals will eliminate all of its current and long-term liabilities by paying the same in cash or issuing Century Metals common shares in settlement thereof;

(ii) Century Metals will then consolidate its outstanding common shares (the “Century Consolidated Shares”) so as to have 5,348,244 Century Consolidated Shares outstanding prior to closing the Acquisition;

(iii) Century Metals and Reyna Silver will undertake private placements (as detailed below) so as to have sufficient funds to undertake planned exploration work programs, and to meet TSXV listing requirements;

(iv) On closing the Acquisition, Century Metals will issue

• Century Consolidated Shares to the holders of Reyna Silver shares, including those issued in connection with the Reyna Financing, on a one-for-one basis;

• issue Century warrants to the holders of Reyna warrants, including those issued in connection with the Reyna Financing, on a one-for-one basis;

• Century Consolidated Shares to MAG Silver Corp. on the basis that MAG Silver will hold 19.9% of the aggregate number of Century Consolidated Shares outstanding on closing, in exchange for the cancellation of all the preferred shares held by MAG Silver in Reyna; and

• units comprised of Century Consolidated Shares and warrants to the holders of the Receipts purchased in the Century Financing.

Private Placement Financings

Century Metals and Reyna Silver are raising up to $6,800,000 in conjunction with the Acquisition, through the following concurrent financings:

(a) Reyna is selling units (“Units”) at $0.20 per Unit, each Unit consisting of one Reyna common share and one-half of one warrant (each whole warrant entitling the holder to acquire one Reyna common share at $0.45 per share for 24 months) (the “Reyna Financing”); and 

(b) Century is selling subscription receipts (“Receipts”) at $0.20 per Receipt (the “Century Financing”). Each Receipt entitles the holder to receive either (i) one Century Consolidated Share and one-half of one warrant upon completion of the Acquisition, or (ii) the return of the subscription proceeds should the Acquisition not close within 90 days from the date of closing the financing. Each whole warrant will entitle the holder to purchase one Century Consolidated Share at a price of $0.45 per share for 24 months following closing.

To date, Reyna has raised $5,056,108 through the sale of its Units; and Century has raised $1,492,500 through the sale of its Receipts. 

Related Party Matters and Shareholder Approval

As previously announced, the Acquisition will be a “Reverse Takeover” under Policy 5.2 of the TSX Venture Exchange (“TSXV”). 

In accordance with TSXV Policy, Century Metals advises of the following insider interests:

• Interests of Insiders of Reyna Silver in Century Metals:
  • EMC Capital Markets, a private company of which Jorge Ramiro Monroy is the founder and managing director and Michael Wood is a director, is the owner of 800,000 common shares (pre-Consolidation) of Century Metals; and
  • Michael Wood is the owner of 433,333 common shares (pre-Consolidation) of Century Metals.
• Interests of insiders of Century Metals in Reyna Silver:
  • Century Global, the principal shareholder of Century Metals, has an approximate 3% equity interest in Reyna Silver Limited (Hong Kong), the principal shareholder of Reyna Silver. Century Global does not otherwise have any equity interest in Reyna Silver, and does not exercise any control, directly or indirectly, over the affairs of Reyna Silver Limited (Hong Kong). 

None of the directors or officers of Century Metals have any direct or indirect interest in Reyna Silver. Based on the limited nature of the above relationships, the completion of the Acquisition will not be considered a “Related Party Transaction” under TSXV Policy or MI 61-101. 

It is anticipated that Century Metals will seek approval of its shareholders by the written consent of the holders of a majority of Century’s outstanding shares. It is anticipated shareholders will be requested to approve: (A) the Acquisition, (B) the change of name of Century to such name as may be specified by Reyna Silver, (C) the election of new directors, (D) the Consolidation, (E) any change of control which may arise pursuant to the Acquisition, and (F) such other matters that may be reasonably required in order to give effect to the Acquisition.

Principals of the Resulting Issuer

Upon closing of the Acquisition, it is expected that the following persons will be the principals or insiders of Century Metals:

• Jorge Ramiro            Director and Chief Executive Officer
• Michael Wood           Director
• Sandy Chim             Director and Executive Chairman of the Board
• Peter Jones              Director
• Century Global Commodities Corp., a Cayman company listed on the TSX (symbol: CNT), will be the holder of 5,348,244 shares, to represent approximately 7.45% of the anticipated outstanding shares of Century Metals. No individuals directly or indirectly beneficially hold a controlling interest in CNT. Sandy Chim, the chairman of Century Metals, is also the CEO and President of CNT.
• Reyna Silver Limited, a Hong Kong company (“Reyna Hong Kong”), will be the holder of 11,000,000 shares, to represent approximately 15.32% of the anticipated outstanding shares of Century Metals. The majority shareholder of Reyna Hong Kong is Emerging Markets Capital (a private Hong Kong company), which is wholly owned by Jorge Ramiro.

No Chief Financial Officer or Corporate Secretary for the resulting issuer has yet been identified. Such individuals will be disclosed once determined.

Definitive Agreement

Further to the Company’s news release dated December 31, 2020, Century Metals and Reyna Silver continue to negotiate in good faith and settle a definitive agreement (the “Definitive Agreement”). The Company expects to settle the Definitive Agreement on or before March 31, 2020 (previously expected to be settled by February 29, 2020).

Reyna Silver’s Material Property

Reyna Silver is engaged in the business of mineral exploration of silver properties in Mexico. Its material mineral property is the Guigui Project in central Chihuahua State, Mexico. The following is a summary of a draft technical report dated February 26, 2020 on the Guigui Project as prepared by Stephen R Maynard, M.S., C.P.G. for Century Metals and Reyna Silver:

The Guigui Project is comprised of seven mining concessions over 4,554 hectares between and south of the East and West Camps of the historic Santa Eulalia Mining District in central Chihuahua State, Mexico (see Figure 1 below). Reyna Silver optioned the Guigui project from MAG Silver Corp. in 2019 for US$8,500 plus 100 preferred shares that convert to 19.9% of the capital of Reyna upon it raising CAD$5,000,000 and obtaining a public listing. A former owner holds a 2.5% NSR on the project.

The Santa Eulalia Mining District is the largest of a number of important Ag-Pb-Zn-Cu-Au Carbonate Replacement Deposits that occur along the intersection of the Laramide-aged Mexican Thrust Belt and the Tertiary volcanic plateau of the Sierra Madre Occidental. Santa Eulalia is a highly elongated system in which the distal (mantos to dike and sill contact skarns) parts of the spectrum have been encountered and exploited. The proximal, stock-related portions of the spectrum have never been found, and exploration for them is the basis of exploration at Guigui.

A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/f7badf2f-32c6-4d43-8d87-e511e462a0d6

Work carried out on the Guigui Project between 1991 and 2015 includes:

• Detailed geologic mapping with emphasis on mapping volcanic stratigraphy, structures cutting the volcanics and alteration. Geochemical samples were taken of all structures and mineralized outcrops. This was accomplished via Landsat image analysis, 1:40,000 B&W air-photo analysis, and 1:10,000-scale geologic outcrop mapping. 
• Geophysical surveys to locate the intrusive centre and determine the thickness of the volcanic cover. The surveys included: gravimetrics, ground magnetics, CSAMT (Controlled Source Audio Magneto-Tellurics), and NSAMT (Natural Source Audio Magneto-Tellurics). 
• Definition of drilling targets based on geology, geochemistry and geophysics. 
• Airborne ZTEM/magnetics study and satellite hyperspectral study.
• Detailed geologic mapping of the Guigui 2, 3 and 4 claims. This work defined zones of fluorite-cemented breccias, but was suspended prior to completion.
• Rock-chip sampling totaling 104 samples.
• Fifteen diamond-drill holes totaling 9,514.6 m.

The following is the recommended exploration work program for the Guigui Project:

CONCEPT / ACTIVITY	COST (USD$)
Compilation of historical mapping and sampling with recent geophysical and satellite imagery	$25,000
Completion of detailed mapping and field check of results of compilation	$149,000
Re-processing of geophysical data	$50,000
Selection and prioritization of drill targets, and community relations with surface owners	$20,000
Additional geophysical studies	$150,000
Permitting and surface-access agreements	$50,000
Phase I drilling (5,000 metres)	$1,000,000
Phase II drilling (5,000 metres)	$1,000,000
TOTAL	$2,444,000

Reyna Silver Financial Information

Consolidated financial statement information for Reyna Silver for the fiscal year ended December 31, 2019 and the period from incorporation (June 19, 2018) to December 31, 2018 is provided below, which financial information has been prepared by management of Reyna Silver and is in the process of being audited. The consolidated financial statements of Reyna Silver include information of Reyna Silver, S.A.P.I. de C.V., a wholly owned Mexican subsidiary of Reyna Silver.

Unaudited Consolidated Statement of Financial Position Information

	December 31, 2019		December 31, 2018
Assets
Cash	$1,104,553		$101,626
Exploration and Evaluation Assets	$2,314,665		$2,305,063
TOTAL	$3,462,442		$2,422,023
Liabilities
Shareholders’ Loan	$227,814		$243,845
Other liabilities	$22,968		$77,202
TOTAL	$250,782		$321,046
Shareholders’ Equity	$3,221,660		$2,100,977

Unaudited Consolidated Statement of Comprehensive Loss Information

	December 31, 2019			December 31, 2018
Revenue	Nil			Nil
Operating Expenses	$161,012			$50,953
Exploration Expenses	$349,368			$134,632
Net Loss	($510,380)			($185,585)

Since December 31, 2019, Reyna Silver has raised in excess of $4.0 million dollars through the Reyna Financing, which financing remains open.

Qualified Persons

The scientific and technical information contained in this news release has been reviewed and approved by Stephen R. Maynard, C.P.G., an independent consulting geologist who is a “Qualified Person” (QP) as such term is defined under National Instrument 43-101 - Standards of Disclosure for Mineral Projects.

Conditions of Closing

Completion of the Acquisition and related transactions will be subject to the same conditions to closing as previously announced on December 31, 2019.

Sponsorship

Century Metals will apply to the TSXV for waiver of sponsorship of the Acquisition to the extent that no exemption from the sponsorship requirements is available under TSXV policies.

Trading Halt

Trading of the common shares of Century Metals have been and will remain halted pending further filings with the TSXV.

On Behalf of the Board of Directors of Century Metals Inc.

Sandy Chim Chief Executive Officer

For further information please contact:Sandy Chim1-416-977-3188investors@centurymetals.ca

CAUTIONARY STATEMENTS

Completion of the transaction is subject to a number of conditions, including but not limited to, TSXV acceptance and, if applicable, disinterested shareholder approval. Where applicable, the transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the transaction, any information released or received with respect to the transaction may not be accurate or complete and should not be relied upon. Trading in the securities of Century Metals should be considered highly speculative.

The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this news release.

This press release contains “forward-looking information” within the meaning of Canadian securities legislation. The forward-looking information contained in this press release represents the expectations of Century Metals as of the date of this press release and, accordingly, is subject to change after such date. Forward-looking information is based on, among other things, opinions, assumptions, estimates and analyses that, while considered reasonable by Century Metals at the date the forward-looking information is provided, are inherently subject to significant risks, uncertainties, contingencies and other factors that may cause actual results and events to be materially different from those expressed or implied by the forward-looking information. The risks, uncertainties, contingencies and other factors that may cause actual results to differ materially from those expressed or implied by the forward-looking information may include, but are not limited to, risks generally associated with the Company’s business, as described in Century’s prospectus dated April 3, 2019. There is no assurance the reverse takeover, acquisition of Reyna Silver, or any of the other related matters outlined above will complete on the terms as contemplated, or at all. Readers should not place undue importance on forward-looking information and should not rely upon this information as of any other date. While Century may elect to, it does not undertake to update this information at any particular time except as required in accordance with applicable laws.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.