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ARC Fund II Increases Stake in Cautivo Mining Inc.

/FOR DISSEMINATION IN CANADA AND OVER CANADIAN NEWS SERVICES ONLY/

TORONTO , Jan. 8, 2020 /CNW/ - Arias Resource Capital Fund II L.P. ("ARC II"), a Cayman Islands exempted limited partnership, and Arias Resource Capital Fund II ( Mexico ) L.P., an Ontario limited partnership ("ARC Mexico "), announced that they, in the aggregate, acquired 9,387,143 common shares ("Shares") in the capital of Cautivo Mining Inc. ("Cautivo"), in connection with the completion of a U.S. $1.0 million non-brokered private placement of Shares on December 27, 2019 by Cautivo (the "Offering"), previously announced by way of a press release by Cautivo dated December 18, 2019 pertaining to the Offering, among other matters. In connection with the closing of the Offering, ARC II acquired 8,883,139 Shares and ARC Mexico acquired 504,004 Shares at a price of CAD$0.14 per Share.  As a result of the closing of the Offering, combined ownership of ARC II and ARC Mexico (together "ARC Fund II") increased from around 92% to approximately 93% of the issued and outstanding Shares of Cautivo.

ARC II, ARC Mexico and Arias Resource Capital Fund L.P. ("ARC I", and together with ARC II and ARC Mexico, the "ARC Funds") are managed by Arias Resource Capital Management L.P. ("ARCM"). The respective general partner of each of the ARC Funds retains the power to make investment and voting decisions in respect of the securities (including the Shares) beneficially owned by the ARC Funds.  J. Alberto Arias is the sole director of each of the general partners of the ARC Funds and indirectly controls ARCM.  As such, J. Alberto Arias may be deemed to share voting and dispositive power with respect to the Shares beneficially owned by the ARC Funds and ARCM, but he disclaims any beneficial ownership of any such securities, except to the extent of his pecuniary interest therein.

Following the completion of the Offering, the ARC Funds' and ARCM's aggregate proportionate interest in Cautivo increased from 94.65% to 95.78%, as follows:



Pre-Shares Offering Closing

Post-Shares Offering



Number of
Shares

(#)

Percentage
Ownership

(%)

Number of
Shares

(#)

Percentage
Ownership

(%)

Change in

Percentage
Ownership

(%)

ARC I

1,054,439

3.01

1,054,439

2.37

-0.64

ARC II

30,395,076

86.70

39,278,215

88.37

+1.67

ARC Mexico

1,724,608

4.92

2,228,612

5.01

+0.09

ARCM

8,137

0.02

8,137

0.02

0

TOTAL:

33,182,260

94.65

42,569,403

95.78

+1.12

 

The foregoing percentages were calculated based on 44,445,871 Shares issued and outstanding as at December 27, 2019 (after giving effect to the Offering) and 35,058,728 Shares issued and outstanding immediately prior to giving effect to the Offering.

ARC II and ARC Mexico acquired the additional Shares for investment purposes. The ARC Funds may, from time to time, acquire additional securities of Cautivo and/or dispose of such securities as they may deem appropriate. Other than with respect to the Going-Private Transaction (as defined below), the ARC Funds and ARCM currently have no other plans or intentions that relate to or would result in any of the actions listed in Items 5 (a) to (k) of Form 62-103F1 – Required Disclosure Under the Early Warning Requirements, but depending on market conditions, general economic and industry conditions, trading prices of Cautivo's securities, Cautivo's business, financial condition and prospects and/or other relevant factors, the ARC Funds may develop such plans or intentions in the future.

As disclosed by Cautivo in its notice of meeting and management information circular (the "Circular"), each dated December 27, 2019 , ARC Fund II has proposed to the Corporation a going-private transaction (the "Going-Private Transaction") in order to eliminate the Corporation's financial and management burden of operating as a reporting issuer. The Going-Private Transaction is subject to shareholder approval and approval by the Canadian Securities Exchange. Further details concerning ARC Fund II's proposal and the Going-Private Transaction may be found in the Circular, which is available under the Corporation's SEDAR profile at www.sedar.com.

This news release has been disseminated in accordance with the early warning requirements of securities laws of each of the provinces and territories of Canada (other than Québec).

The dissemination of this release in the United States or to any United States news service may constitute a violation of U.S. securities laws.

SOURCE Arias Resource Capital Fund II L.P.


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