Barksdale Announces up to $3 Million Private Placement of Convertible Debentures and Extension of Existing Convertible Debentures and Warrants

Rhea-AI Summary

Barksdale Resources (TSXV: BRO) (OTCQX: BRKCF) has secured up to C$3 million in secured convertible debentures from Delbrook Capital Advisors. The funding will support completion of 3,300 feet of drilling at the Sunnyside Project in Southern Arizona and facilitate a C$1.0 million payment to Regal Resources USA to secure a 51% stake in the project.

The new debentures feature a 10% annual interest rate, mature on December 31, 2026 (extendable to 2027), and are convertible at C$0.12 per share. The offering includes an initial C$2 million advance with potential additional advances totaling C$1 million. The company will issue 5,000,000 warrants exercisable at C$0.12 until December 31, 2027.

Additionally, Barksdale has agreed to extend existing C$1.5 million convertible debentures and 8,000,000 warrants from December 31, 2025 to December 31, 2027. A finder's fee of 1,200,000 common shares at C$0.12 is payable to Medalist Capital Advisors.

Positive

• Secured up to C$3 million in new funding for project development
• Will achieve 51% ownership stake in Sunnyside Project upon completion
• Drilling program currently underway with expected one-month completion time
• Successfully extended existing debt maturity by two years

Negative

• 10% interest rate on new debentures indicates relatively high cost of capital
• Potential dilution from convertible debentures and warrants at C$0.12 per share
• Additional 1,200,000 shares issued as finder's fee creates further dilution

Vancouver, British Columbia--(Newsfile Corp. - April 14, 2025) - Barksdale Resources Corp. (TSXV: BRO) (OTCQX: BRKCF) ("Barksdale" or the "Company") announces that it has agreed to issue up to C$3 million in secured convertible debentures (the "New Debentures") to investment funds managed by Delbrook Capital Advisors Inc. (together, "Delbrook").

Barksdale plans to use the first tranche to complete the remaining 3,300 feet of drilling on the Sunnyside Project in Southern Arizona and to make the C$1.0 million payment to Regal Resources USA, Inc. to complete the remaining earn-in requirements for a 51% stake in the Sunnyside Project.

"We are delighted to have Delbrook partner with us to fund the remaining drilling and provide the cash payment needed to complete our earn-in to a 51% interest in the Sunnyside Project," said William Wulftange, CEO of Barksdale. "We are also excited to have potential additional accordion funds available from Delbrook to allow us the flexibility after this earn-in stage to get started on drilling the down dip extensions of South 32's Taylor and Peake Projects on the Sunnyside Project ground. We are currently in negotiations with a global drilling company to start those diamond drill holes following the completion of the earn-in."

Last week, drilling commenced on the Sunnyside Project. The drilling will be comprised of a number of reverse-circulation drill holes that will continue the exploration program begun in the fall of 2024 (see news release dated November 14, 2024). Envirotech Drilling of Winnemucca, Nevada has been contracted to provide the drilling services and is progressing towards an expected completion time of one month.

The Company is planning to complete approximately 3,500 to 4,000 feet of drilling on a number of exploration targets including porphyry-hosted hypogene chalcocite mineralization and associated structures, as well as targeting structures that contain silver-lead-zinc-copper mineralization that was fed or bled from deeper, more extensive mineralization.

The New Debentures will bear interest of 10% per annum, will be supported by secured guarantees from certain of Barksdale's direct and indirect subsidiaries, including the entity that holds a membership interest in the joint venture limited liability company for the Sunnyside Project, and will come due on December 31, 2026, subject to extension by mutual agreement of the parties to December 31, 2027. The New Debentures are convertible into common shares of the Company at a conversion price of C$0.12 per share, subject to adjustment in accordance with the terms of the New Debentures.

The maximum principal amount of C$3,000,000 will be offered by way of an initial advance in the amount of C$2,000,000 and additional subsequent advances in the aggregate maximum amount of C$1,000,000. Subject to certain conditions precedent, including those related to maintaining a minimum 51% interest in the Sunnyside Project, Barksdale may request subsequent advances at any time up to the first anniversary of the New Debentures, with each such subsequent advance being a minimum amount of C$250,000. The Company also intends to grant 5,000,000 detachable share purchase warrants in connection with the New Debentures and each warrant will entitle the holder to acquire one common share of the Company at a price of C$0.12 until December 31, 2027.

Subject to TSX Venture Exchange ("TSXV") approval, the Company and Delbrook have also agreed to extend the maturity date of their existing secured convertible debentures in the principal amount of C$1,500,000 ("Existing Debentures") as well as the expiry date of an aggregate of 8,000,000 detachable share purchase warrants previously issued in connection with the Existing Debentures (the "Extension Warrants") from December 31, 2025 to December 31, 2027. In consideration of the extensions, the security granted for the Existing Debentures will be amended to align with that of the New Debentures, with both the Existing Debentures and New Debentures ranking pari passu as senior secured obligations of the Company.

A finder's fee of 1,200,000 common shares at a deemed price of $0.12 is payable to Medalist Capital Advisors Inc. in regard of the foregoing financing.

All securities issued with respect to the New Debentures, the Existing Debentures and the Extension Warrants and underlying common shares and associated amendments are subject to the prior acceptance of the TSXV.

Barksdale Resources Corp., a 2023 OTCQX BEST 50 Company, is a base metal exploration company headquartered in Vancouver, B.C., that is focused on the acquisition, exploration and advancement of highly prospective base metal projects in North America. Barksdale is currently advancing the Sunnyside copper-zinc-lead-silver and San Antonio copper projects, both of which are in the Patagonia mining district of southern Arizona, as well as the San Javier copper-gold project in central Sonora, Mexico.

ON BEHALF OF BARKSDALE RESOURCES CORP

William Wulftange
Chief Executive Officer and Director

Terri Anne Welyki
Vice President of Communications
778-238-2333
TerriAnne@barksdaleresources.com

For more information, please phone 778-558-7145, email info@barksdaleresources.com or visit www.BarksdaleResources.com.

Neither the 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 news release.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS: This news release contains certain "forward-looking information" and "forward-looking statements" (collectively "forward-looking statements") within the meaning of applicable securities legislation. Forward-looking statements are frequently, but not always, identified by words such as "expects", "anticipates", "believes", "intends", "estimates", "potential", "possible", and similar expressions, or statements that events, conditions, or results "will", "may", "could", or" should" occur or be achieved. All statements, other than statements of historical fact, included herein, without limitation, statements relating to the foregoing financing and amendments are forward-looking statements. There can be no assurance that such statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements. Forward-looking statements reflect the beliefs, opinions and projections on the date the statements are made and are based upon a number of assumptions and estimates that, while considered reasonable by Barksdale, are inherently subject to significant business, economic, competitive, political and social uncertainties and contingencies. Many factors, both known and unknown, could cause actual results, performance or achievements to be materially different from the results, performance or achievements that are or may be expressed or implied by such forward-looking statements and the Company has made assumptions and estimates based on or related to many of these factors. All forward-looking statements contained in this news release are qualified by these cautionary statements and those in the Company's continuous disclosure filings available on SEDAR+ at www.sedarplus.ca. Readers should not place undue reliance on the forward-looking statements contained in this news release concerning these items. Barksdale does not assume any obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change, except as required by applicable securities laws.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/248488

FAQ

What is the purpose of Barksdale Resources' (BRKCF) new C$3 million convertible debenture offering?

The funding will complete 3,300 feet of Sunnyside Project drilling and provide C$1.0 million to secure a 51% stake in the project through Regal Resources USA.

What are the key terms of BRKCF's new convertible debentures with Delbrook Capital?

10% annual interest, December 31, 2026 maturity (extendable to 2027), C$0.12 conversion price, with C$2 million initial advance and up to C$1 million in additional advances.

How many warrants is BRKCF issuing with the new convertible debentures?

5,000,000 warrants exercisable at C$0.12 until December 31, 2027.

What changes were made to BRKCF's existing debentures and warrants?

Extended maturity of C$1.5 million existing debentures and 8,000,000 warrants from December 31, 2025 to December 31, 2027.