Revolving Credit Line Facility	9 Months Ended
Sep. 30, 2023
REVOLVING CREDIT LINE FACILITY
Revolving Credit Line Facility	NOTE 12 - REVOLVING CREDIT LINE FACILITY On February 4, 2021, the Company (through DynaMineras) entered into a Revolving Credit Line Facility and Commercial Offtake Agreement (the “RCL”), with a commercial buyer. On March 23, 2022, DynaMineras assigned its obligations to DynaMéxico and the buyer consented to the assignment. On August 2, 2023, the RCL was extended through December 2026 in an Amendment Agreement (the “Amendment”). Under the terms of the RCL and Amendment: • The Company will deliver 100% of its produced concentrates to the buyer and provider of the RCL, through December 31, 2026, with evergreen annual extensions thereafter until either party terminates with at least 365 days’ notice; • An initial RCL was established by the buyer in the amount of $3.75M USD. • On May 1, 2021, the RCL increased to an amount equal to 80% of the prior 3 months’ revenue. • Each successive month, the RCL shall be adjusted according to the Company’s prior 3 months’ revenue to a maximum advance line of $17.5 million as specified in the Amendment. • The RCL shall never be less than $3.75M USD. • The RCL will be interest free for 45 days. • The RCL is to be repaid through deliveries of concentrates or cash within 120 days. • Beginning in September 2023, up to $10M of the RCL advance may be converted into a one-year installment loan bearing interest at 3M SOFR + 7.5% and amortized as follows: Month 1, interest only; Month 2-11, 5% principal plus interest; and Month 12, final 50% principal plus interest. Converting the advance amount into an installment loan will reduce the available on a pro rata percentage basis; • If the RCL is converted into an installment loan subsequent deliveries during the term of the loan will be paid in cash within ten days of delivery; • The Amendment provides the buyer with a right of first refusal during the Offtake Agreement, to provide offtake financing and purchase other concentrates (zinc, silver, copper, etc) and dore from the Company’s open pit and underground operations. The RCL is included under Customer Advances on the unaudited consolidated balance sheet. Deposits under Revolving Credit Line Facility Under the terms of the RCL, the Company received the following advances from the buyer (in millions): (1) $9.35 advance on December 28, 2022. Settled on February 16, 2023. (2) $9.60 advance on February 21, 2023. Settled on March 31, 2023. (3) $9.20 advance on March 31, 2023. Settled on May 17, 2023. (4) $9.85 advance on May 18, 2023. Settled on June 28, 2023. (5) $10.0 advance on June 29, 2023. Settled on August 14, 2023. (6) $10.75 advance on August 17, 2023. Settled on September 16, 2023. (7) $9.75 advance on September 29, 2023.

Revolving Credit Line Facility

9 Months Ended

Sep. 30, 2023

NOTE 12 - REVOLVING CREDIT LINE FACILITY

On February 4, 2021, the Company (through DynaMineras) entered into a Revolving Credit Line Facility and Commercial Offtake Agreement (the “RCL”), with a commercial buyer. On March 23, 2022, DynaMineras assigned its obligations to DynaMéxico and the buyer consented to the assignment. On August 2, 2023, the RCL was extended through December 2026 in an Amendment Agreement (the “Amendment”). Under the terms of the RCL and Amendment:

•

The Company will deliver 100% of its produced concentrates to the buyer and provider of the RCL, through December 31, 2026, with evergreen annual extensions thereafter until either party terminates with at least 365 days’ notice;

•

An initial RCL was established by the buyer in the amount of $3.75M USD.

•

On May 1, 2021, the RCL increased to an amount equal to 80% of the prior 3 months’ revenue.

•

Each successive month, the RCL shall be adjusted according to the Company’s prior 3 months’ revenue to a maximum advance line of $17.5 million as specified in the Amendment.

•

The RCL shall never be less than $3.75M USD.

•

The RCL will be interest free for 45 days.

•

The RCL is to be repaid through deliveries of concentrates or cash within 120 days.

•

Beginning in September 2023, up to $10M of the RCL advance may be converted into a one-year installment loan bearing interest at 3M SOFR + 7.5% and amortized as follows: Month 1, interest only; Month 2-11, 5% principal plus interest; and Month 12, final 50% principal plus interest. Converting the advance amount into an installment loan will reduce the available on a pro rata percentage basis;

•

If the RCL is converted into an installment loan subsequent deliveries during the term of the loan will be paid in cash within ten days of delivery;

•

The Amendment provides the buyer with a right of first refusal during the Offtake Agreement, to provide offtake financing and purchase other concentrates (zinc, silver, copper, etc) and dore from the Company’s open pit and underground operations.

The RCL is included under Customer Advances on the unaudited consolidated balance sheet.

Deposits under Revolving Credit Line Facility

Under the terms of the RCL, the Company received the following advances from the buyer (in millions):

(1)

$9.35 advance on December 28, 2022. Settled on February 16, 2023.

(2)

$9.60 advance on February 21, 2023. Settled on March 31, 2023.

(3)

$9.20 advance on March 31, 2023. Settled on May 17, 2023.

(4)

$9.85 advance on May 18, 2023. Settled on June 28, 2023.

(5)

$10.0 advance on June 29, 2023. Settled on August 14, 2023.

(6)

$10.75 advance on August 17, 2023. Settled on September 16, 2023.

(7)

$9.75 advance on September 29, 2023.