Telson Signs a Renewable Power Purchase Agreement

 

Telson Mining Corporation (“Telson” or the “Company”) (TSX-V – TSN, OTC Pink – SOHFF, Frankfurt – TSGN (formerly SQ82)) is pleased to report concluding a renewable power purchase agreement “Green Energy Agreement” for Campo Morado mine.

Highlights

• A 10-year term take-or-pay purchase agreement for renewable sources generated electrical energy at a cost of MXN$1.10 per kilowatt hour (kWh) or equivalent to CAD$0.72 per kWh at current exchange rates
• Green Energy Agreement comes into effect no later than June 2019
• Telson committed to 42.00 GWh per year
• Under the Green Energy Agreement, the cost per kWh is approximately 32% lower than the last nine-month average price paid and approximately 54% lower than September’s kWh price alone
• Estimated operating cost savings of approximately CAD$2 million during the first-year equating to an estimated 3.5% decrease in overall current operating costs
• Telson will comply with the latest local regulatory requirements of renewable energy use

Telson has concluded a renewable power purchase agreement “Green Energy Agreement” with Energia Solar Alaia IV, S.A.P.I de C. V. (“Energia Solar”), as part of the Company’s ongoing efforts to reduce its environmental footprint and to reduce mine operating costs over the long term.

Under the terms of the Green Energy Agreement, the Company is committed to purchase 42.00 GWh of electrical power per year from Energia Solar at an inflation-indexed fixed price of MXN$1.1 kWh for a period of ten years. The ten-year term agreement can be extended by mutual agreement and the electrical power and rates comes into effect no later than June 1, 2019 or upon completion of the construction of Energia Solar’s renewable energy plant.

Over the past nine months of operations at Campo Morado mine, the power consumption purchased from Comision Federal de Electricidad (“CFE”) was on average 32% higher than the costs per kWh negotiated under the Green Energy Agreement. Likewise, compared to September’s purchase price the cost per kWh is about 54% lower than the CFE’s escalating costs.

“The renewable power purchase agreement with Energia Solar provides Telson with a steady supply of renewable source generated power at an inflation-indexed fixed price that will significantly reduce environmental footprint and reduce operating costs and future profitability. Additionally, this agreement satisfies local regulations that require Campo Morado mine to use a minimum of 25% green generated energy.” states Antonio Berlanga, CEO. “It is also a significant step forward for Telson to do its part in the world-wide battle against global warming”

About Telson Mining Corporation

Telson Mining Corporation is a Canadian based mining company with two Mexican gold, silver and base metal mining projects. Telson is currently in commercial production at its 100% owned Campo Morado Mine in Guerrero, Mexico. Effective May 15, 2018 Telson declared commercial production at Campo Morado. Telson is currently producing zinc and lead concentrates with gold, silver and copper as by-products, processing approximately 2,000+ tons per day through the Campo Morado milling facilities.

Telson's 100% owned Tahuehueto Project, located in north-western Durango State, Mexico is currently in under development. Pre-production commenced at Tahuehueto in August 2017, currently mining at a rate around 200 tonnes per day and shipping ore to a third-party toll mill for processing. Management has a targeted timeline at Tahuehueto to be producing with its own on-site mineral processing plant, with a designed capacity of at least 1,000 tonnes per day, during the first quarter of 2019.

Regular metal concentrate deliveries and sales are well underway from both projects.

Visit: www.telsonmining.com

On behalf of the board of directors

(signed) “Ralph Shearing”

Ralph Shearing, P.Geol, President and Director

Qualified Persons

This press release was prepared under the supervision and review of Ralph Shearing, P.Geol., President and Director of Telson Mining Corporation, a Professional Geologist registered in Alberta as a member of the professional association APEGA, and a Qualified Person as defined by NI 43-101. Data verification by Mr. Shearing includes personal inspection of the Campo Morado mine site, reviewing mining facilities, drill core, underground development and discussing work programs and results with geology and mining personnel.

Cautionary Note Regarding Production Decisions and Forward-Looking Statements

It should be noted that at Tahuehueto, Telson is mining reserves supported by a pre-feasibility published early 2017 while at Campo Morado pre-production mining is proceeding without the benefit of pre-feasibility or feasibility studies that outline mineral reserves and has declared commercial production at Campo Morado prior to completing a feasibility study of mineral reserves demonstrating economic and technical viability. Accordingly, readers should be cautioned that Telson’s Campo Morado production decision has been made without a comprehensive feasibility study of established reserves such that there is greater risk and uncertainty as to future economic results from the Campo Morado mine and a higher technical risk of failure than would be the case if a feasibility study was completed and relied upon to make a production decision. Telson has completed a preliminary economic assessment (“PEA”) mining study on the Campo Morado mine that provides a conceptual life of mine plan and a preliminary economic analysis based on the previously identified mineral resources (see News Release dated November 8, 2017 and April 4, 2018). This will soon be replaced by a pre-feasibility study (“PFS”) that will allow the application of modifying factors to the mineral resources to allow a portion of them to be converted to mineral reserves.

Statements contained in this news release that are not historical facts are “forward-looking information” or “forward-looking statements” (collectively, “Forward-Looking Information”) within the meaning of applicable Canadian securities laws. Forward Looking Information includes, but is not limited to, disclosure regarding possible events, conditions or financial performance that is based on assumptions about future economic conditions and courses of action; the timing and costs of future activities on the Company’s properties, such as production rates and increases; success of exploration, development and bulk sample processing activities and timing for processing at its own mineral processing facility on the Tahuehueto project site. In certain cases, Forward-Looking Information can be identified by the use of words and phrases such as “plans”, “expects”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or variations of such words and phrases. In preparing the Forward-Looking Information in this news release, the Company has applied several material assumptions, including, but not limited to, that the current exploration, development, environmental and other objectives concerning the Campo Morado Mine and the Tahuehueto Project can be achieved, the continuity of the price of gold, zinc, lead and other metals, economic and political conditions and operations. Forward-Looking Information involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the Forward-Looking Information. There can be no assurance that Forward-Looking Information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on Forward-Looking Information. Except as required by law, the Company does not assume any obligation to release publicly any revisions to Forward-Looking Information contained in this news release to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

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

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