The company said it was "very pleased" to announce a letter of intent regarding financing with the Accendo syndicate, comprising mining bank Accendo Banco, Empress Royalty and Endeavour Financial.

Accendo would provide a previously-flagged $12 million loan, which was expected to close in March, Empress a $5 million silver stream and the trio along with third parties would arrange a private placement of up to $8 million priced at C20c per unit.

The funds would also help meet debt service obligations and be for working capital purposes.

Telson estimated US$15.4 million was needed to finish construction and commissioning at Tahuehueto, which it said was about 60% complete.

The company said the deal would also allow it to negotiate a potential restructuring of its loan debt with Trafigura and Nyrstar, plus the Accendo syndicate would appoint three new directors and a COO to Telson.

"After many months of extensive hard work and negotiation, I am delighted on behalf of the Telson team to deliver to Telson shareholders and investors this excellent news," president and CEO Ralph Shearing said.

"This funding package now allows Telson to immediately reinitiate construction at the Tahuehueto mine site, after which we expect to rapidly advance construction targeting to commence initial pre-production within 10-12 months and full-scale production 12-14 months after funding."

Telson had hoped to focus on its gold project 18 months ago when it put its base metals Campo Morado mine in Guerrero state on care and maintenance, in August 2019.

However it restarted Campo Morado in January 2020, citing an improvement in the zinc price and community relations.

The operation had since achieved "significant increases" in throughput and concentrate production and benefited from increasing metal prices, with fourth quarter revenues estimated at US$8.7 million.

Tahuehueto was expected to have a 21-year mine life, producing an average annual 16,100 ounces of gold, 177,100oz of silver, 900,000 pounds of copper, 3.2 million pounds of lead and 5.6Mlb of zinc, according to a 2017 prefeasibility study.

Telson shares (TSXV: TSN), which have ranged between C4-32.5c over the past year, shot up 32.5% yesterday to C26.5c to capitalise it at $48.4 million (US$38.4 million).