Search Minerals signs convertible loan agreement

Executive Summary

• Search Minerals Inc. entered into a $3 million unsecured convertible revolving loan agreement with Petra Holdings Company Inc.; proceeds will fund development of the Foxtrot and Deep Fox projects and general corporate purposes.
• The company also converted $404,053.73 of indebtedness to LeadFX Inc. into a fixed‑term unsecured convertible loan on the same terms, further restructuring its debt.
• Both loans bear 15% annual interest, mature in three years, and are convertible into common shares at an initial price of C$0.50 per share (with post‑first‑anniversary pricing tied to TSX‑V averages).

Key Details

• Petra Convertible Loan
• Principal amount: $3 million (aggregate).
• Initial drawdown: $750,000 at closing.
• Use of proceeds: development of Foxtrot & Deep Fox deposits (equipment acquisition, site operations, infrastructure, technical assessments, environmental compliance), general working capital, corporate purposes, and reduction of other indebtedness.
• Interest rate: 15% per annum, payable quarterly in arrears.
• Maturity: 3 years from initial drawdown; principal payable on that date.
• Conversion terms:
  • Option to convert at any time before maturity.
  • Price C$0.50/share for the first year after closing.
  • After first anniversary, price equals average TSX‑V closing price over the 10 days preceding Petra’s notice of conversion, but not less than C$0.50 or the market price per TSX‑V policy.
  • Shares issued on conversion subject to a four‑month‑plus‑one‑day hold period under securities law.
• Governance rights: While ≥ $500,000 principal remains or Petra holds ≥ 5% of common shares, Petra may nominate Michael Pearson as a director (subject to TSX‑V policies).

• Information rights: Petra receives copies of all continuous disclosure documents filed on SEDAR+ concurrently with filing.

• LeadFX Convertible Loan

• Principal amount: $404,053.73 (converted debt).
• Origin of debt: unpaid trade payables from Sep 2023 – May 2024; previously non‑interest bearing, payable on demand.
• Interest rate: 15% per annum, payable quarterly in arrears.
• Maturity: 3 years from loan closing; principal payable on that date.

• Conversion terms identical to Petra loan (C$0.50/share initial price, post‑first‑anniversary pricing tied to TSX‑V average, hold period).

• Conditions Precedent for Both Loans

• Execution and delivery of definitive loan agreements with each lender.
• Approval by Search Minerals’ board of directors.
• Approval by the Toronto Stock Exchange – Venture (TSX‑V).

Notable Quotes

“There is growing confidence in our plan to build a secure, sustainable Canadian supply of critical minerals. This financing marks a critical milestone, enabling the company to advance work on our two primary deposits and move closer to unlocking the full potential of the 64‑kilometre St. Lewis‑Port Hope Simpson critical rare earth elements district in Newfoundland and Labrador,” – Joseph Lanzon, President & CEO, Search Minerals.