Search Minerals Announces Shares-for-Debt Transaction

Rhea-AI Summary

Search Minerals (OTC:SHCMF) announced a shares-for-debt transaction with related party LeadFX to settle $404,053.73 of indebtedness by issuing 808,107 common shares at a deemed price of $0.50 per share on December 3, 2025.

The issuance is intended to preserve cash and strengthen the balance sheet. The shares will be subject to a statutory hold period of four months and one day. The company relied on exemptions under MI 61-101 for valuation and minority approval because the value issued is under 25% of market capitalization. No new control person will be created. Completion is subject to TSXV approval.

Positive

• Eliminates $404,053.73 of outstanding debt
• Issues 808,107 shares to preserve cash
• Intended to strengthen the balance sheet

Negative

• Issuance of 808,107 shares may dilute existing shareholders
• Transaction is a related party deal requiring MI 61-101 exemptions
• Completion remains subject to TSXV approval

News Market Reaction – SHCMF

+3.98%

1 alert

+3.98% News Effect

On the day this news was published, SHCMF gained 3.98%, reflecting a moderate positive market reaction.

Data tracked by StockTitan Argus on the day of publication.

Key Figures

Debt settled: $404,053.73 Shares issued: 808,107 shares Deemed price: $0.50 per share +5 more

8 metrics

Debt settled $404,053.73 Outstanding indebtedness exchanged for shares in shares-for-debt deal

Shares issued 808,107 shares Common shares issued to LeadFX at deemed price

Deemed price $0.50 per share Pricing for shares-for-debt transaction

Hold period Four months and one day Statutory restriction on issued shares under securities laws

Convertible loan size $3.0M Unsecured convertible revolving loan with Petra Holdings

Initial drawdown $750,000 First draw on convertible revolving loan

Remaining availability $2.25M Undrawn portion of convertible revolving loan

Loan interest rate 15% per annum Interest on unsecured convertible loan, payable quarterly

Market Reality Check

Price: $0.2410 Vol: Volume 7,536 is 28% above...

normal vol

$0.2410 Last Close

Volume Volume 7,536 is 28% above the 20-day average of 5,889. normal

Technical Price at $0.2905 is trading above the 200-day MA of $0.17.

Peers on Argus

Peers in Other Industrial Metals & Mining showed mixed moves, from -13.81% (VTEC...

Peers in Other Industrial Metals & Mining showed mixed moves, from -13.81% (VTECF) to +8.29% (NBYCF), suggesting SHCMF’s -3.45% move was more stock-specific than sector-driven.

Common Catalyst Only one peer (LILIF) reported separate project news, indicating no broad sector catalyst.

Historical Context

5 past events · Latest: Dec 03 (Positive)

Pattern 5 events

Date	Event	Sentiment	Move	Catalyst
Dec 03	Debt settlement	Positive	+4.0%	Shares-for-debt deal eliminates $404,053.73 owed to LeadFX with equity.
Nov 14	Financing / loan	Positive	+18.1%	Closed $3.0M unsecured convertible revolving loan, first draw $750,000.
Oct 17	Management change	Positive	+4.3%	Appointed new CFO with 25 years finance experience to support key projects.
Oct 10	Private placement	Positive	+14.8%	Amended private placement terms to raise up to $993,847 in proceeds.
Sep 19	Board appointment	Positive	+44.0%	Added director with 30+ years mining and tech leadership experience.

Pattern Detected

Recent corporate, financing, and governance news have all coincided with positive next-day price reactions.

Recent Company History

Over the last few months, Search Minerals reported several financing and leadership milestones. A $3.0M unsecured convertible revolving loan and amended private placement terms supported project funding and balance sheet flexibility. Board and CFO appointments in September and October 2025 aligned with strong positive price reactions. Today’s shares-for-debt transaction on Dec 3, 2025 continues the theme of restructuring obligations at a deemed price of $0.50 per share to reduce indebtedness while preserving cash resources.

Market Pulse Summary

This announcement detailed a shares-for-debt transaction exchanging $404,053.73 of obligations for 8...

Analysis

This announcement detailed a shares-for-debt transaction exchanging $404,053.73 of obligations for 808,107 shares at $0.50 to preserve cash and strengthen the balance sheet. It follows recent financings, including a $3.0M unsecured convertible revolving loan, and governance changes such as new board and CFO appointments. Investors may focus on how cumulative equity issuance, a 15% loan rate, and project execution at Foxtrot and Deep Fox affect future funding needs and capital structure.

Key Terms

shares-for-debt transaction, statutory hold period, related party transaction, Multilateral Instrument 61-101, +2 more

6 terms

shares-for-debt transaction financial

"it has entered into a transaction with LeadFX Inc. to settle an aggregate..."

A shares-for-debt transaction is when a company settles what it owes by issuing new shares to creditors instead of paying cash, effectively converting loans or unpaid bills into equity. For investors this matters because it reduces the company’s debt load but increases the number of shares outstanding, which can dilute existing ownership, change control dynamics, and signal the company’s cash strain or a move to strengthen its balance sheet — like swapping an IOU for a bigger slice of the pie.

statutory hold period regulatory

"The Shares issued ... will be subject to a statutory hold period of four months..."

A statutory hold period is a legally required time window during which newly issued securities or shares received by insiders cannot be sold. It matters to investors because it affects when those shares can enter the market, influencing supply, short-term liquidity and potential price pressure—think of it like a temporary “no-sell” tag that prevents an immediate flood of items onto a store shelf after a big restock.

related party transaction regulatory

"the issuance of Shares to LeadFX Inc. constitutes a "related party transaction"..."

A related party transaction is any deal or transfer of value between a company and people or entities with close ties to it — such as executives, major owners, family members, or affiliated businesses. Investors watch these transactions because they can favor insiders over outside shareholders, skirt fair market pricing, or hide risks; like selling your car to a relative at a friendly price, they require clear disclosure and scrutiny to judge impact on value.

Multilateral Instrument 61-101 regulatory

"under Multilateral Instrument 61-101 - Protection of Minority Security Holders..."

Multilateral Instrument 61-101 is a securities regulation that sets rules for certain corporate deals—like mergers, asset sales, or related-party transactions—to protect minority shareholders by requiring extra disclosure, independent valuation and, in many cases, formal shareholder approval. Think of it as an impartial referee and checklist that forces companies to show the full playbook and get a vote or an independent price opinion, so investors can judge whether a proposed deal is fair and avoid being overridden by insiders.

convertible loan financial

"convert the debt into a fixed term unsecured convertible loan by LeadFX..."

A convertible loan is money lent to a company that can later be changed into shares instead of being repaid in cash. For investors it combines the safety of a loan—priority for repayment if things go wrong—with the potential upside of owning part of the company if its value rises; think of it as lending money that can be swapped for a slice of the company pie under pre-agreed terms. It matters because it affects returns and how much ownership existing shareholders will have.

TSX Venture Exchange regulatory

"subject to the approval of the TSXV.For further information..."

A junior stock exchange in Canada where smaller, early-stage companies list shares to raise capital and gain public visibility. Think of it as a farmers’ market for young businesses: it offers investors a chance to buy into fast-growing but higher-risk ventures, with looser listing rules and typically lower liquidity than major exchanges. It matters because performance and financing on this exchange can signal growth prospects or risk for investors.

AI-generated analysis. Not financial advice.

St. Lewis, Newfoundland and Labrador--(Newsfile Corp. - December 3, 2025) - Search Minerals Inc. (TSXV: SMY) ("Search Minerals" or the "Company") is pleased to announce that it has entered into a transaction with LeadFX Inc. to settle an aggregate of $404,053.73 of outstanding indebtedness (the "Debt") through the issuance of 808,107 common shares of the Company (the "Shares") at a deemed price of $0.50 per Share (the "Shares-for-Debt Transaction"). The Company had previously announced that it would convert the debt into a fixed term unsecured convertible loan by LeadFX to the Company but it has now been determined to complete the Shares for Debt Transaction to eliminate the debt instead.

The Shares-for-Debt Transaction is being undertaken by the Company in order to preserve cash and strengthen its balance sheet. The Shares issued pursuant to the Shares-for-Debt Transaction will be subject to a statutory hold period of four months and one day from the date of issuance in accordance with applicable securities laws and TSX Venture Exchange ("TSXV") policies.

Insider Participation

LeadFX Inc. is a related party of the Company. Accordingly, the issuance of Shares to LeadFX Inc. constitutes a "related party transaction" under Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101").

The Company is relying on the exemptions from the formal valuation requirement under section 5.5(b) of MI 61-101 and the minority shareholder approval requirement under section 5.7(a) of MI 61-101, as the fair market value of the Shares to be issued to the related party does not exceed 25% of the Company's market capitalization.

No new control person will be created as a result of the Shares-for-Debt Transaction.

TSXV Approval

Completion of the Shares-for-Debt Transaction remains subject to the approval of the TSXV.

For further information about Search Minerals, please contact:

Joseph Lanzon
CEO and Director
Telephone: 613-796-5957
Email: joseph.lanzon@searchminerals.ca

About Search Minerals

Search Minerals is focused on exploring for and developing Critical Rare Earths Elements (CREE) as well as transition metals Zirconium (Zr) and Hafnium (Hf) within the emerging Port Hope Simpson - St. Lewis CREE District of South-East Labrador. The Company controls two deposits (Foxtrot and Deep Fox), two drill ready prospects (Fox Meadow and Silver Fox) and numerous other CREE prospects, including Fox Valley, Foxy Lady and Awesome Fox, along a 64 kilometre long belt forming a CREE District in Labrador.

Search Minerals also controls additional CREE assets in the Red Wine CREE District of central Labrador. These include: the drill ready Two Tom Lake CREE-Be-Nb deposit, the Mann #1 CREE-Nb-Be prospect and Merlot CREE Prospect.

Forward-Looking Statements

Statements contained in this news release that are not historical facts are "forward-looking information" or "forward-looking statements" (collectively, "Forward-Looking Information") within the meaning of applicable Canadian securities legislation. In certain cases, Forward-Looking Information can be identified by the use of words and phrases or variations of such words and phrases or statements such as "anticipate", "expect" "plan", "likely", "believe", "intend", "forecast", "project", "estimate", "potential", "could", "may", "will", "would" or "should". Forward-Looking Information in this news release are based on certain material assumptions and involve, known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Search Minerals to be materially different from any future results, performance or achievements expressed or implied by the Forward-Looking Information. Such risks and other factors include, those factors discussed in Search Minerals' public filings. Although Search Minerals has attempted to identify important factors that could affect Search Minerals and may cause actual actions, events or results to differ materially from those described in Forward-Looking Information, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that Forward-Looking Information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on Forward-Looking Information. For further information on these and other risks and uncertainties that may affect the Company's business, see the Company's Management's Discussion and Analysis filed with certain Canadian securities regulators, which are available at www.sedarplus.ca. Except as required by law, Search Minerals does not assume any obligation to release publicly any revisions to Forward-Looking Information contained in this news release to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

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 release.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/276778

FAQ

What did Search Minerals (SHCMF) announce on December 3, 2025?

Search Minerals announced a shares-for-debt deal with LeadFX to settle $404,053.73 by issuing 808,107 shares at $0.50 each.

How many shares will Search Minerals (SHCMF) issue to settle the debt?

The company will issue 808,107 common shares to settle the outstanding debt.

What is the hold period for the shares issued by Search Minerals (SHCMF)?

The issued shares are subject to a statutory hold period of four months and one day from issuance.

Why did Search Minerals (SHCMF) choose a shares-for-debt transaction?

The company said the transaction is intended to preserve cash and strengthen its balance sheet.

Is the LeadFX shares-for-debt transaction for Search Minerals (SHCMF) approved?

Completion of the transaction remains subject to TSXV approval.

Does the Search Minerals (SHCMF) shares-for-debt deal create a new control person?

The company stated no new control person will be created as a result of the transaction.