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Aftermath Amends Chilean Silver-Gold Projects Acquisition Agreements

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Vancouver, BC – January 15, 2019 – Aftermath Silver Ltd. (AAG.H – NEX) (“Aftermath” or the “Company”) is pleased to announce it has reached agreements in principle to amend the terms of two existing agreements relating to the Company’s acquisitions of two significant silver-gold projects in Chile.

Challacollo Silver-Gold Project

As announced by news release dated August 1, 2018, the Company has entered into a non-binding Letter of Intent (the “Challacollo LOI”) with Mandalay Resources Inc. (“Mandalay”) to purchase the Challacollo silver-gold project (“Challacollo”) by the purchase of 100% of Mandalay’s shares in the Chilean holding company Minera Mandalay Challacollo Limitada (“MMC”), which currently owns 100% of the Project. Challacollo is the only asset held by MMC.

Under the terms of the Challacollo LOI, as amended, the Company may acquire MMC for an aggregate of:

  • CA$1,000,000 cash to be paid on or before February 28, 2019;
  • CA$1,000,000 cash to be paid on or before September 30, 2020;
  • CA$5,500,000 on or before February 28, 2021, to be paid, at Mandalay’s option, in Aftermath shares of up to a value of CA$2,750,000, and the balance in cash; provided that in no event shall the number of Aftermath shares issued represent more than 49% of Aftermath’s outstanding shares following such payment; and
  • Mandalay to retain a 3% Net Smelter Returns royalty on production, up to a maximum of CA$3,000,000.

The Company, by making an additional CA$500,000 payment, shall have the right to vary the February 28, 2021 payment by paying CA$3,000,000 on or before February 28, 2021 and an additional CA$3,000,000 payment on or before February 28, 2022.  In each case, Aftermath will have the option to pay up to 50% of each payment in Aftermath shares, subject to Mandalay holding no more than 49% of Aftermath’s outstanding shares following each such payment.

Challacollo is a low sulphidation epithermal deposit which hosts historic Mineral Resources1 including Indicated Resources of 4.7 million tonnes at 200 g/t silver and Inferred Resources of 1.6 million tonnes at 134 g/t silver, with associated gold credits.

Drilling has defined the historic mineral resources on the principal vein (Lolón Vein) to a depth of about 200 m below surface.  The Company will focus its initial exploration efforts on parallel vein systems, not included in the historic mineral resource, that have some preliminary drilling. The oxidation level bottoms at approximately 200 m below surface; however, the down-dip extent of the mineralized structures remains unknown. Gold and base metal grades are generally observed to increase with depth.

The Challacollo project is located in Chile’s Tarapaca Region (Region I), 130 km southeast of the major port city of Iquique and 50 km south of the town of Pica. The project is approximately 30 km east of the Pan American Highway, via Teck Resources’ Quebrada Blanca Copper Mine access road. The project is 139 km southeast of the major Pacific port city of Iquique.

Road and Power transmission lines are located 15-30 km from the property, in part to service nearby mines of Collahuasi and Quebrada Blanca. The Project includes water rights.

Cachinal Silver-Gold Project

As announced by news release dated June 25, 2018, the Company has entered into a definitive agreement (the “Cachinal Agreement”) with Halo Labs Inc (Formally Apogee Opportunities Inc). (“Apogee”) to purchase Apogee’s holding in the Cachinal De La Sierra Silver-Gold Project (“Cachinal”) through the purchase of Apogee’s shares in the Chilean holding company Minera Cachinal S.A., representing 80% ownership.

The Cachinal Agreement provides for the Company to pay Halo $1,500,000 in cash on closing. Under the amended agreement, the Company will now pay:

  • CA$500,000 in cash on closing, to occur no later than February 28, 2019;
  • CA$500,000 in cash to be paid on or before 12 months following closing; and
  • CA$500,000 in cash to be paid on or before 18 months following closing.
  • Halo will have the right to convert any part of the purchase price that remains unpaid at any time into shares of the Company at a price of $0.20 per share.

Cachinal, is a low sulphidation epithermal deposit which currently hosts current Mineral Resources2 including Indicated Resources of 5.7 million tonnes at 101 g/t silver and Inferred Resources of 0.8 million tonnes at 115 g/t silver, with associated gold credits.

Shallow drilling has defined the current mineral resources principally to a depth of 150 m below surface and provides sufficient evidence to interpret the presence of high-grade shoots within the vein system extending below the potential base of an open pit.  Following these high-grade shoots to depth with drilling will be the initial focus of the Company’s efforts to expand the silver-gold mineralisation. The oxidation level bottoms at about 120 – 150 m below surface; however, the down-dip extent of the mineralized structures remains unknown.

The Cachinal Silver-Gold Project is located in Chile’s Antofagasta Region (Region II), 175 km southeast of Antofagasta. The project is located about 40 km east of the Pan American Highway, in a nearly flat plain at an elevation of around 2,700 m above sea level, 16 km north of Austral Gold’s Guanaco gold-silver mine. The project includes 16 claim blocks for a total area of 4,867 hectares, in two non-contiguous areas. The Mineral Resource is located centrally within the northern of the two claim groups.

Mr. Sean Hurd, President and CEO of the Company, commented “The acquisitions of the high grade Challacollo and Cachinal silver-gold projects will launch Aftermath into the upper ranks of silver dominant explorer/developers, with current and historic pro-forma total of 48.6 million tonnes Indicated Mineral Resources at 146 g/t and 9.9 million tonnes Inferred Mineral Resource at 128 g/t. The new deal structures will allow us to focus on advancing resource development on both projects with the goal of adding.

The two agreements, as amended, are subject to the satisfaction of customary closing conditions, including receipt of all regulatory approvals and any applicable shareholder approvals.

Qualified Person

Peter Voulgaris, MAIG, MAusIMM, a consultant to the Company, is a non-independent qualified person as defined by NI 43-101. Mr. Voulgaris has reviewed the technical content of this news release, and consents to the information provided in the form and context in which it appears.

About Aftermath Silver Ltd

Aftermath Silver Ltd is a Canadian junior exploration company engaged in acquiring, exploring, and developing mineral properties with an emphasis on silver in Chile. The Company is focused of growth through the discovery and acquisition of quality projects in stable jurisdictions. Aftermath continues to seek new opportunities to take advantage of the relatively low silver price.

ON BEHALF OF THE BOARD OF DIRECTORS

Sean Hurd

Sean Hurd, President & CEO

Notes on Mineral Resources

  1. Challacollo Historic Mineral Resource: An independent “Qualified Person”, as defined in National Instrument 43-101 (“NI 43-101”), has not done sufficient work on behalf of Aftermath to classify the historical estimate as a current indicated or inferred mineral resource, and Aftermath is not treating the historical estimate as a current mineral resource.

For full details please see the March 2015 43-101 Technical Report “NI 43-101 Technical Report for the Challacollo Silver Project, Region 1, Chile” QPs Mroczek, M., Collins, and M., Butler, S. of Mining Plus Canada Consulting Ltd. and Tapia, J.C., of Sedgeman S.A. Prepared for Mandalay Resources, available on the Mandalay Resources SEDAR profile.

  • Challacollo mineral resources were classified according to the CIM Definition Standards for Mineral Resources and Mineral Reserves (December 2005).
  • Mineral Resources are estimated at a cut-off grade of 60 g/t Ag.
  • Mineral Resources are estimated using a silver price of US$24/oz, a gold price of US$1,400 per ounce, metallurgical recoveries of 92% for silver and 75% for gold, and operating costs of US$50 per tonne.
  • A density of 2.45 g/cm3 is used as a base density with adjustments according to the variation of the estimated barium, lead and zinc grades.
  • No capping of Ag grades has been applied due to low grade variability. Au grades have been capped at 3 g/t for two sample composites 4.57 g/t Au and 4.11 g/t Au respectively.
  1. Cachinal current Mineral Resource Estimate: for full details please see the April 2018 43-101 Technical Report “Independent Technical Report for the Cachinal Silver-Gold Project, Region II, Chile.” QPs Cole, G and Couture, J. of SRK Consulting (Canada) prepared for Aftermath Silver filed on the Aftermath Silver SEDAR profile.
  • Cachinal mineral resources were classified according to the CIM Definition Standards for Mineral Resources and Mineral Reserves (December 2005).
  • The Silver equivalent (AgEq) grades are calculated using gold to silver ratio of 50:1, using metal price assumptions of US$12.50 per ounce of silver, US$650 per ounce of gold and metallurgical recoveries of eighty-five percent for silver and gold. Zinc does not contribute to revenues.
  • Open Pit shell constrained Mineral Resources are reported at a cut-off of 40 g/t AgEq to a vertical depth of 150 m below surface, constrained within a Lerchs Grosman optimised pit shell.
  • Underground constrained Mineral Resources are reported at a cut-off of 150 g/t AgEq.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

Forward Looking Statements

Certain statements within this news release, other than statements of historical fact relating to Aftermath Silver, are to be considered forward-looking statements with respect to the Company’s intentions for the Cachinal Project in Chile. Forward-looking statements include statements that are predictive in nature, are reliant on future events or conditions, or include words such as “expects”, “goal”, “potential”, “anticipates”, “plans”, “believes”, “considers”, “significant”, “intends”, “targets”, “estimates”, “seeks”, attempts”, “assumes”, and other similar expressions.

The forward-looking statements are based on a number of assumptions which, while considered reasonable by Aftermath Silver Ltd, are, by their nature, subject to inherent risks and uncertainties and are not guarantees of future performance. Factors that could cause actual results to differ materially from those in forward-looking statements include: the interpretation of previous and current results, the accuracy of exploration results, the accuracy of Mineral Resource Estimates, the anticipated results of future exploration, the forgoing ability to finance these acquisitions further exploration and development, delays in the completion of exploration, the future prices of silver and gold, and other metals, and general economic, market and/or business conditions. There can be no assurances that such statements and assumptions will prove accurate and, therefore, readers of this news release are advised to rely on their own evaluation of the information contained within. In addition to the assumptions herein, these assumptions include the assumptions described in Aftermath Silver Ltd’s Management’s Discussion and Analysis for the three months ended August 31, 2018, as filed with the TSX Venture Exchange and available on SEDAR under Aftermath’s profile at www.sedar.com.

Although Aftermath Silver Ltd. has attempted to identify important risks, uncertainties and other factors that could cause actual performance, achievements, actions, events, results or conditions to differ materially from those expressed in or implied by the forward-looking statements, there may be other risks, uncertainties and other factors that cause future performance to differ from what is anticipated, estimated or intended. Unless otherwise indicated, forward-looking statements contained herein are as of the date hereof and Aftermath Silver Ltd. does not assume any obligation to update any forward-looking statements after the date on which such statements were made, except as required by applicable law.