Brasnova Energy Materials Inc. Announces Assignment of Option on Cuatro Hermanos Project

Rhea-AI Summary

Brasnova Energy Materials (OTC:PMDRF) executed a binding Assignment Agreement transferring its underlying option on the Cuatro Hermanos (4H) Project/b) to 4H Copper Holding SAS (4HCH) on January 15, 2026. 4HCH will immediately pay the current outstanding obligations of within 10 days and will advance a total of US$2.0 million to Brasnova over 24 months: a minimum US$200,000 within 90 days, US$1,000,000 cumulative within 12 months, and US2,000,000 cumulative within 24 months.

4HCH will fund future development and accrued obligations (including amounts due before Jan 31, 2026). If 4HCH fails to meet payment or funding obligations, the 4H Project reverts to Brasnova. Brasnova retains a 1% Net Smelter Royalty. The transaction implies approximately CA$2,750,000 in cash to Brasnova over 24 months, primarily to repay loans of CA$1,606,369 as of Sept 30, 2025. Edward Low returns as CFO and will receive 250,000 stock options at CA$0.15 with a five-year term, subject to AGM and TSXV approval.

Positive

• Immediate cure of outstanding obligation: US$200,000 payable within 10 days
• Committed development funding: US$2.0M to be deployed to Brasnova within 24 months
• Brasnova retains a 1% Net Smelter Royalty on future 4H production
• Proceeds (~CA$2.75M) targeted to reduce loans of CA$1,606,369 as of Sep 30, 2025

Negative

• Company was in default under the Original Option Agreement at announcement
• Transaction depends on 4HCH meeting payment schedule; failure triggers reversion risk
• Management change and option grant require TSXV and AGM approvals before effect

01/15/2026 - 08:00 AM

Vancouver, British Columbia--(Newsfile Corp. - January 15, 2026) - Brasnova Energy Materials Inc. (TSXV: BEM) ("BEM'' or the "Company") is pleased to announce that the Company has executed a binding agreement (the "Assignment Agreement") assigning the original underlying option agreement over the Cuatro Hermanos Project (the "4H Project"), dated January 16th, 2023 (the "Original Option Agreement"). Under the terms, 4H Copper Holding SAS ("4HCH") agrees to provide all future development financing for the 4H Project and to fund the underlying obligations including an immediate payment of the outstanding obligations under the Original Option Agreement. Brasnova is currently in default under the terms of the Original Option Agreement with the vendors of the 4H Project. The Assignment Agreement sets forth the terms and conditions of the assignment of the Original Option Agreement, as follows:

1. 4HCH will make immediate direct payment on the current outstanding obligations due under the Original Option Agreement (US$200,000) within 10 days of the execution date of the Assignment Agreement.
2. 4HCH will advance US$2.0 million in cash payments to BEM within 24 months of the execution date of the Assignment Agreement, as per the following schedule:
   1. a minimum of US$200,000 in cash payments, will be due within 90 days of the execution date of the Assignment Agreement;
   2. a cumulative minimum of US$1,000,000 in cash payments, will be due within 12 months of the execution date of the Assignment Agreement; and
   3. a cumulative minimum of US$2,000,000 in cash payments, will be due within 24 months of the execution date of the Assignment Agreement.
3. 4HCH will provide all future development financing for the 4H Project and fund the underlying obligations of the Original Option Agreement, including all accrued amounts and all payments due before January 31, 2026.
4. 4HCH will terminate and revert back to BEM, its 100% equity interest in the 4H Project, if it fails to advance the payment for the current outstanding obligations due under the Original Option Agreement or the US$2.0 million in cash payments to BEM within 24 months or fails to fund the underlying obligations of the Original Option Agreement after the execution date of the Assignment Agreement.
5. BEM will initiate the assignment of a 100% equity interest in the 4H Project to 4HCH immediately upon payment of the current outstanding obligations due under the Original Option Agreement.
6. BEM will retain a one percent Net Smelter Royalty on all future production from the 4H Project and any other concessions which may be added to the 4H Project within 10 kilometres of the centre point of the current concessions.

The approximately CA$2,750,000 in cash payments over twenty-four months from this 4H Project assignment transaction will be primarily used by the Company to pay down current loan obligations which as of September 30, 2025 totalled CA$1,606,369.

Further, Brasnova is pleased to welcome back Edward Low as Chief Financial Officer. The Company would like to thank Nancy Zhao for filling this role over the past year. Brasnova will issue Mr. Low 250,000 common share options at a price of 15 cents with a term of five years, subject to approval of the stock option plan at the next AGM. The management changes and options issuance are subject to TSXV Venture Exchange approval.

ABOUT BRASNOVA ENERGY MATERIALS INC.

Brasnova Energy Materials is focused on securing, developing and monetizing Brazilian critical materials assets and related materials technologies, to build shareholder value.

On behalf of the Board of Directors of
BRASNOVA ENERGY MATERIALS INC.

"Maria Conejo"

Maria Conejo, Director
info@brasnovaem.com

FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE

The information contained herein contains "forward-looking statements" within the meaning of applicable securities legislation. Forward-looking statements relate to information that is based on assumptions of management, forecasts of future results, and estimates of amounts not yet determinable. Any statements that express predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance are not statements of historical fact and may be "forward-looking statements.

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

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/280496

FAQ

What did Brasnova (PMDRF) announce about the Cuatro Hermanos assignment on January 15, 2026?

Brasnova assigned its option on the 4H Project to 4HCH, which will pay US$200,000 immediately and advance US$2.0M to Brasnova over 24 months.

How much cash will 4HCH pay Brasnova and on what schedule in the PMDRF assignment?

4HCH will pay US$200,000 within 10 days, a minimum US$200,000 within 90 days, US$1.0M cumulative within 12 months, and US2.0M cumulative within 24 months.

What royalty does Brasnova retain after assigning the 4H Project (PMDRF)?

Brasnova retains a 1% Net Smelter Royalty on all future production from the 4H Project and nearby concessions within 10 km.

How will the cash from the 4H assignment affect Brasnova's balance sheet (PMDRF)?

Approximately CA$2.75M expected over 24 months will be primarily used to reduce existing loans totaling CA$1,606,369 as of Sept 30, 2025.

What happens if 4HCH fails to advance payments under the assignment for PMDRF?

If 4HCH fails to pay the current obligations or the US$2.0M within 24 months or fund required obligations, the 4H Project will terminate and revert to Brasnova.

Who is the new CFO for Brasnova and what are the option details (PMDRF)?

Edward Low will return as CFO and is to receive 250,000 common share options at CA$0.15 with a five-year term, subject to AGM and TSXV approval.