News

VANCOUVER,  B.C.  –  BAROYECA  GOLD  &  SILVER  INC.,  further  to  its  news  releases  of November 2, 2020 and January 18, 2021, Baroyeca Gold & Silver Inc. (the “Company”) is pleased to announce that it has completed its review process with the TSX Venture Exchange for the acquisition of the Santa Barbara Property and the Falan Property both situated in Colombia, South America and is proceeding to close the acquisitions with Malabar Gold Corp. (“Malabar”) the Optionor.

Further particulars of each property and the terms of the agreements are as follows:

The Santa Barbara Property

The Santa Barbara Property consists of 110.86 hectares located in the Municipality of San Martín de Loba, in Bolivar Department, Colombia.  The purchase includes a facility that is being used to carry out bulk sampling on the property along with all of the machinery, equipment, surface rights, licenses, permits, data and records relating to the properties and held by Malabar. All permits are in place to conduct the sampling activities on the Property. The Property is subject to a 2.5% NSR retained by Malabar. The Property interests, equipment, operations and permits are all held through a group of four subsidiary companies of Malabar, two incorporated in Panama and two incorporated in Colombia.

Pursuant to the terms of the option agreement, to earn a 100% interest in the Santa Barbara Property, subject to the royalty, Baroyeca must make cash payments of $1,750,000 to Malabar, issue 7,000,000 Baroyeca common shares to Malabar and must incur expenditures of $500,000 on the Property, as follows:

   Cash Payments Share Issuances Exploration Expenditures
 Year 1  $450,000(1)  3,500,000 $500,000
 Year 2  $825,000 1,750,000 -
 Year 3 $475,000 1,750,000 -
 Total $1,750,000 7,000,000 $500,000

Note 1.  $50,000 of which of which was paid on signing.

During the term of the option, Baroyeca will have full access to enter and operate the Property.

The Falan Property

The Falan Property consists of 2,585.94 hectares, located in the Municipality of Falan, in Tolima Department, Colombia. Although substantially larger than the Santa Barbara Property, the Falan Property is less advanced, work being at the exploration stage.  The Falan Property is subject to a 3.5% NSR payable to an underlying vendor of the Property to Malabar.

Pursuant to the terms of the option agreement, to earn a 100% interest in the Falan Property, Baroyeca must make cash payments of $1,050,000 and issue 5,000,000 Baroyeca common shares to Malabar over the term of the option, as follows:

   Cash Payments Share Issuances Exploration Expenditures
 Year 1  $250,000(1)  2,500,000 -
 Year 2  $500,000 1,250,000 -
 Year 3 $300,000 1,250,000 -
 Total $1,050,000 5,000,000 -

Note 1.  $50,000 of which of which has been paid on signing.

During the term of the option, Baroyeca will have full access to enter and operate the Property.

Amendments to the Agreements

As originally signed, the Option Agreements contained certain pre-conditions to closing, which, through Amended Property Option Agreements completed January 11, 2021, the parties agree to remove due to changes in circumstances of the parties. The amended agreements remained subject to acceptance for filing by the TSX Venture Exchange (the “Exchange”).

The amendments made also deferred part of the cash payments due on Closing into the second year of the Options - $400,000 with respect to the Santa Barbara Property and $250,000 with respect to the Falan Property. Should the Company complete an equity financing in the order of

$3,000,000 in the first year following Closing, the deferred payments, by agreement, will be accelerated and paid within 10 days of closing of such financing.

Possible Change of Control

The issuance of the share consideration to Malabar with respect to both Option Agreements could possibly result in a change of control of Baroyeca. Pursuant to its policies, the Exchange required the Company to obtain the approval of the majority of the disinterested shareholders of the Company to this possible  change  of  control  which  approval  was  granted  by  the  disinterested  shareholders  at  the Company’s Annual General Meeting held December 30, 2020.

As part of Closing, the Company is issuing to Malabar a total of 6,000,000 common shares of the

Company. Prior to Closing, the Company’s issued share capital is 25,576,994 common shares. Following the issue of the 6,000,000 shares the outstanding share capital will be 31,576,994 of which the 6,000,000 shares will represent 19% which is less than the 20% level of deemed control.

Private Placement

As announced January 29, 2021, the Company’s private placement of 9,200,000 units of its securities at a price of $0.22 per unit has closed raising for the Company a total of $2,024,000. As disclosed in the use of proceeds for this financing, part of these funds will be used to pay the cash amounts due to Malabar at Closing pursuant to the Option Agreements.

Closing

To close the acquisition of the options to acquire the Santa Barbara Property and the Falan Property pursuant to the terms of the Amended Property Option Agreements, the Company is issuing to Malabar a total of 6,000,000 common shares in the capital of the Company and making a cash payment to Malabar of $600,000. The 6,000,000 shares will bear a legend and be restricted from trading until June 6, 2021.

BAROYECA GOLD & SILVER INC.

Per: “Richard Wilson
         Richard Wilson, CEO

Neither the TSX Venture Exchange nor its Regulation Services Provider accepts responsibility for the adequacy or the accuracy of this release.