Denarius Metals Announces Consent Solicitation Process to Amend Terms of Its Convertible Unsecured Debentures

Rhea-AI Summary

Denarius Metals (DNRSF) has initiated a consent solicitation process to amend terms of its convertible unsecured debentures worth CA$33.1 million total. The proposed amendments include: delaying Gold Premium Payments by one year (to January 2026 for 2023 debentures and June 2026 for 2024 debentures) and extending maturity dates by one year. The company requires 66 2/3% approval from debenture holders by December 18, 2024. Holders who consent will receive a 2% fee in additional debentures. The changes aim to align funding with cash flow from the Zancudo Project following delays in environmental impact study approval.

Positive

• Company maintains monthly interest payments and quarterly gold premiums structure
• Proposed amendments aim to improve financial stability during project ramp-up
• Management team showing confidence by indicating intention to approve amendments

Negative

• Significant delays in receiving Zancudo Project's environmental impact study approval
• Need to extend debt maturity indicates potential cash flow concerns
• Additional debenture issuance for consent fees will increase debt burden
• Delay in Gold Premium Payments suggests operational timeline setbacks

Toronto, Ontario--(Newsfile Corp. - December 2, 2024) - Denarius Metals Corp. (Cboe CA: DMET) (OTCQX: DNRSF) ("Denarius Metals" or the "Company") announced today that it has commenced a consent solicitation process to approve certain amendments (the "Amendments") to the trust indentures for its convertible unsecured debentures. The Company has an aggregate principal amount of CA$19.3 million of convertible unsecured debentures issued and outstanding under a trust indenture dated October 19, 2023, as amended and supplemented on October 31, 2023 (together, the " 2023 Indenture") and an aggregate principal amount of CA$13.8 million of convertible unsecured debentures issued and outstanding under a trust indenture dated May 30, 2024, as amended and supplemented on June 25, 2024 (together, the " 2024 Indenture").

The proposed Amendments, if approved and implemented, to the 2023 Indenture and the 2024 Indenture include:

2023 Indenture:

• delaying the commencement of the Gold Premium Payment (as defined in the 2023 Indenture) from January 31, 2025 to January 31, 2026; and
• extending the Maturity Date (as defined in the 2023 Indenture) of the debentures from October 19, 2028 to October 19, 2029.

2024 Indenture:

• delaying the commencement of the Gold Premium Payment (as defined in the 2024 Indenture) from June 30, 2025 to June 30, 2026; and
• extending the Maturity Date (as defined in the 2024 Indenture) of the debentures from May 30, 2029 to May 30, 2030.

Serafino Iacono, Executive Chairman and CEO, commented, "While we are optimistic we will soon receive approval of the Zancudo Project's environmental impact study ("EIS"), the Amendments are designed to respond to the significant adverse impact of the extended delays to date to receive the EIS approval on the timing for the startup of the project's mining operations. The Amendments recognize that the Company will require some time after receiving the EIS approval to ramp up mining operations at the Zancudo Project. The Amendments will align funding for the gold premium payments, as applicable, with the operating cash flow to be generated by production from the Zancudo Project following the initial ramp up period and maintain the Company's financial stability during Zancudo's ramp up period, including its ability to meet its financial obligations as they come due. In addition, the Amendments will continue to provide the holders of the debentures with the potential for superior returns through the monthly interest payments, the quarterly gold premiums and convertibility of the debentures into shares of the Company."

To make the Amendments, the Company requires the written consent of the holders of at least 66 2/3% of the total outstanding principal amount of debentures issued under each of the 2023 Indenture and the 2024 Indenture. Materials related to the consent solicitation process are being disseminated to holders of the debentures commencing today. The Company is relying on Cboe Canada's exemption pursuant to section 10.09(2) of its listing manual allowing the Company to satisfy the approval requirement by obtaining a written resolution. The documents can also be found on the Company's website at www.denariusmetals.com and by reviewing its profile on SEDAR+ at www.sedarplus.ca. The deadline to respond in the consent solicitation process is December 18, 2024, unless extended by the Company at its sole discretion.

Holders of the debentures who respond to the solicitation and consent to the Amendments will receive a consent fee equal to two percent (2%) of the number of debentures they hold. Consent fees will be satisfied through the issuance of additional debentures and will not be paid in cash. Holders of the debentures who do not respond to the solicitation or approve the Amendments will not receive payment of such fee from the Company even though the supplemental indentures will be binding on them if the Amendments become effective. Pursuant to the consent solicitation process, directors and management of the Company, including Mr. Serafino Iacono (Executive Chairman and CEO), Mr. Michael Davies (Chief Financial Officer), Mr. Federico Restrepo-Solano (Director and COO) and Ms. Amanda Fullerton (General Counsel and Secretary), have indicated their intention to approve the Amendments and, as such, will receive consent fees totaling CA$168,160 if the Amendments become effective. All debentures issued as a consent fee will be subject to a statutory four month hold period.

About Denarius Metals

Denarius Metals is a Canadian junior company engaged in the acquisition, exploration, development and eventual operation of polymetallic mining projects in high-grade districts. Denarius Metals has two mines expected to be in operation in the next 12 months, the Zancudo Project in Colombia and the Aguablanca Project in Spain.

In Spain, Denarius Metals owns a 100% interest in the Lomero Project, a polymetallic deposit located on the Spanish side of the prolific copper rich Iberian Pyrite Belt, and a 50% interest in Rio Narcea Recursos, S.L., which owns a 5,000 tonnes per day processing plant and has the rights to exploit the historic producing Aguablanca nickel-copper mine, located in Monesterio, Extremadura, Spain, approximately 88 km northwest of the Lomero Project. Denarius Metals also owns a 100% interest in the Toral Project, a high-grade zinc-lead-silver deposit located in the Leon Province, Northern Spain.

In Colombia, Denarius Metals is carrying out construction activities at its 100%-owned Zancudo Project, a high-grade gold-silver deposit, which includes the historic producing Independencia mine, located in the Cauca Belt, about 30 km SW of Medellin.

Additional information on Denarius Metals can be found on its website at www.denariusmetals.com and by reviewing its profile on SEDAR+ at www.sedarplus.ca.

Cautionary Statement on Forward-Looking Information

This news release contains "forward-looking information", which may include, but is not limited to, statements with respect to anticipated business plans or strategies, including receipt of the EIS approval for Zancudo, the start up of mining operations at the Zancudo Project, operating cash flow and production from the Zancudo Project, the Company's financial stability and ability to meet its financial obligations when due, returns on the debentures and the potential for success of the consent solicitation process. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", or "believes" or variations (including negative variations) of such words and phrases, or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Denarius Metals to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Factors that could cause actual results to differ materially from those anticipated in these forward-looking statements are described under the caption "Risk Factors" in the Company's Annual Information Form dated April 25, 2024 which is available for view on SEDAR+ at www.sedarplus.ca. Forward-looking statements contained herein are made as of the date of this press release and Denarius Metals disclaims, other than as required by law, any obligation to update any forward-looking statements whether as a result of new information, results, future events, circumstances, or if management's estimates or opinions should change, or otherwise. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, the reader is cautioned not to place undue reliance on forward-looking statements.

For Further Information, Contact:

Michael Davies
Chief Financial Officer
(416) 360-4653
investors@denariusmetals.com

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/232060

FAQ

What amendments is Denarius Metals (DNRSF) proposing to its convertible debentures?

Denarius Metals is proposing to delay Gold Premium Payments by one year and extend maturity dates by one year for both its 2023 and 2024 convertible debentures.

What is the consent fee offered by Denarius Metals (DNRSF) for approving the amendments?

Debenture holders who consent to the amendments will receive a 2% fee paid in additional debentures, not cash.

What is the total value of convertible debentures affected by Denarius Metals' (DNRSF) amendments?

The amendments affect CA$19.3 million in 2023 debentures and CA$13.8 million in 2024 debentures, totaling CA$33.1 million.

When is the deadline for Denarius Metals (DNRSF) debenture holders to approve the amendments?

The deadline for debenture holders to respond to the consent solicitation is December 18, 2024, unless extended by the company.