TSX-V: TT Signing of the Asset Purchase Agreement for Two Gold Projects

On October 20, 2025, Total Metals Corp. announced it has signed a definitive Asset Purchase Agreement (APA) to acquire the High Lake and West Hawk Lake gold projects from McFarlane Lake Mining Limited. The terms of the acquisition are US$7,250,000 in cash and 3,333,333 common shares of Total Metals at a deemed price of US$0.60 per share.

The acquisition is conditional upon, among other things, the approval of the TSX Venture Exchange and the completion of a concurrent financing. The company is undertaking a private placement to raise gross proceeds of US$10,000,000 at a price of US$0.60 per unit. The proceeds will be used primarily to fund the cash portion of the acquisition (US$7.25M), with the remainder allocated to exploration on its existing Electrolode Project (US$1.54M), finder's fees, permitting, and general working capital.

This news is a material and positive step forward, as it formalizes the Letter of Intent (LOI) announced on September 24, 2025. The signing of the definitive agreement demonstrates that due diligence was satisfactory and both parties are committed to closing the transaction. This acquisition is transformative, adding a high-grade, NI 43-101 compliant resource at the High Lake project, which will become the company's new flagship asset.

However, a critical assessment reveals significant risks for investors at the current share price. The market has already reacted strongly to the initial LOI, with the stock price running from ~$0.66 to a high of $1.30. The current price of $1.16 represents a 93% premium to the US$0.60 (approx. CAD$0.82) financing price. This massive financing overhang creates substantial near-term risk. There is little incentive for new investors to buy shares on the open market at nearly double the price of the large private placement. Participants in the financing could be tempted to sell their shares for a quick profit upon the closing of the deal and the expiry of any hold periods, creating significant selling pressure.

Furthermore, the terms of the financing have been amended since the initial announcement. On September 24, the financing included a mix of LIFE units (warrants at $1.00) and non-LIFE units (warrants at $0.90). On October 8, the company abandoned the LIFE offering and consolidated the entire US$10M financing into a standard private placement with all warrants exercisable at a lower price of $0.90. This move to sweeten the deal for accredited investors may suggest that demand for the financing at the original terms was not as strong as anticipated.

While the acquisition fundamentally improves the company's asset base, the current market valuation appears disconnected from the price at which the company is raising the capital necessary to complete the deal. The risk of the stock price falling towards the $0.60 financing level is high.

Total Metals Corp. is a junior mineral exploration company focused on properties in Ontario, Canada. Its original flagship asset was the 100%-owned Electrolode Project in the Red Lake mining district. The pending acquisition will shift the company's focus to the High Lake Gold Project, which has an existing NI 43-101 compliant mineral resource estimate (April 2023) of 45,800 oz of gold at 9.38 g/t (Indicated) and 96,200 oz of gold at 10.43 g/t (Inferred). This high-grade resource makes it the new flagship project.