McFarlane Lake closes Juby, Knight acquisitions

Executive Summary

• McFarlane Lake Mining Ltd. closed the purchase of a 100 % interest in the Juby gold project and a 25 % JV stake in the adjacent Knight property for US$13,165,677 cash plus 82,023,746 common shares issued to Aris Mining.
• The transaction was funded through a US$15 M senior secured debenture placement and an CAD 8.46 M equity/flow‑through unit offering.
• The acquisition expands McFarlane’s gold resource base to over 2.3 million ounces (historical) and is expected to be accretive; the company will file a NI 43‑101 compliant mineral resource estimate in the coming days.

Key Details

• Purchase Price: US$13,165,677 cash + 82,023,746 common shares (valued at CAD 15 c per share, aggregate deemed value US$8,834,323).
• Ownership Transfer: Aris Mining receives a 19.9 % equity stake in McFarlane Lake as partial consideration.
• Debt Financing:
• 15,000 debenture units for gross proceeds of US$15 M.
• Each unit: one 15 % senior secured debenture (CAD 1,000 face, 13‑month maturity) + 3,200 common share purchase warrants (CAD 0.15 per warrant).
• Use of proceeds: US$10 M for cash portion of acquisition, CAD 2.4 M escrowed as interest reserve, remainder for working capital and corporate expenses.
• Equity Financing:
• 56,106,667 units at CAD 0.15 per unit + 300,000 flow‑through shares at CAD 0.15 per FT share; total gross proceeds CAD 8.461 M.
• Each unit: one common share + ½ warrant (exercise price CAD 0.25, three‑year term).
• Net proceeds applied partially to acquisition cash consideration; balance for working capital and corporate purposes.
• FT share proceeds earmarked for eligible Canadian exploration expenses, to be renounced to subscribers by Dec 31 2025.
• Finder Fees: Up to 5 % of gross debenture proceeds and up to 8 % (or 2 % for “president’s list” investors) of equity proceeds paid to eligible finders.
• Early Warning Reporting: Aris Mining’s acquisition of 19.9 % of McFarlane Lake disclosed per NI 62‑103; no intent to influence control.
• Related Party Transactions: Insiders subscribed to approximately US$991,534 worth of debenture units, units and FT shares; exemptions relied upon under MI 61‑101.
• Resource Context: Juby gold project historically inferred 1.488 M oz @ 0.98 g/t Au and indicated 773 k oz @ 1.13 g/t Au (NI 43‑101 compliant as of July 2020). Updated NI 43‑101 resource estimate forthcoming.
• Advisers & Legal Counsel: Wildeboer Dellelce LLP (legal counsel for McFarlane), Cassels Brock & Blackwell LLP (lenders’ counsel), Fasken Martineau DuMoulin LLP (Aris Mining counsel), ECM Capital Advisors (financial adviser).

Notable Quotes

• “The addition of this project to McFarlane Lake's portfolio is accretive to our business and to shareholder value… we expect to announce an updated mineral resource estimate compliant to NI 43‑101 standards within the coming days.” – Mark Trevisiol, CEO & Chairman.