Pacific Imperial Announces Cancellation of the Brownell Option Agreement

Pacific Imperial Mines Inc. (ppm) and Eagle Plains Resources Ltd. mutually agreed to terminate the Brownell Lake VMS option agreement, effective immediately. The companies cited a lack of funding resulting from the recent cancellation of ppm’s private placement as the cause for the termination.

The company’s board is actively reviewing its strategic options and will be re-evaluating how to move forward. Consequently, the corporate description now lists only Babine and Fenton as current focuses, removing Brownell from the narrative. Forward-looking cautionary language in the release contemplates the company seeking other financing options and the potential of re-engaging Eagle Plains Limited with respect to the Brownell Property.

This release marks the first disclosure in the provided news set that the private placement has been cancelled, as no standalone cancellation press release appears in the materials supplied. The announcement serves as an admission that the company has no funding capacity, a development that directly threatens the two remaining option agreements—Fenton from Hudbay and Babine—which carry hard cash, share, and exploration-spend deadlines.

There are no new financial results in this non-earnings release. All financial figures cited below are prior-period context from the Q3-2026 (nine months to 2026-03-31) as-reported statements and MD&A, not disclosed in today's release.

Pacific Imperial Mines Inc. (ppm) has terminated its option agreement for the Brownell Lake property, a move that coincides with the collapse of a planned capital raise intended to fund its remaining assets. The company’s announcement confirms that a $4 million private placement, which was the sole funding mechanism earmarked for the Fenton and Babine projects, has been cancelled.

The termination of the Brownell Lake option was not entirely unexpected. The company’s most recent Management’s Discussion and Analysis, filed as of June 30, 2025, had already flagged that the option was "not in good standing" and noted that amendment discussions were ongoing. However, the failure of the financing represents a significant operational setback. The cancellation of the placement leaves the company without capital to meet its exploration commitments on the Fenton and Babine properties, which were previously secured through separate earn-in agreements.

The Brownell Lake option was originally acquired via an agreement with Eagle Plains Resources. The loss of this asset follows a series of financial adjustments and corporate actions throughout 2026. In March, the company settled insider debt at a deemed price of $0.04, issuing nearly 6 million shares. By August, that debt package was restructured, reducing the settlement amount to $149,306.59 at a deemed price of $0.015, a roughly 62% reduction in the deemed price. The debt settlement closed in September, with 9,953,772 shares issued at $0.015, bringing CEO Chris McLeod’s ownership to approximately 10% of the issued and outstanding shares.

The cancelled financing was structured as a 10:1 share consolidation followed by a private placement of up to 53,333,333 units at $0.075. The units were to consist of 33.33 million flow-through units for $2.5 million and 20 million non-flow-through units for $1.5 million, each carrying one $0.10 five-year warrant. The proceeds were designated exclusively for the Fenton and Babine properties.

Market observers have noted inconsistencies in the disclosure regarding the consolidation and placement. The release indicated up to 53,333,333 post-consolidation units, while the post-consolidation share count was stated at approximately 9,271,414 shares. A literal interpretation suggests a dilution of roughly 5.8 times existing shares outstanding, with a placement price of $0.075 post-consolidation (approximately $0.0075 pre-consolidation) representing a 95% discount to the prevailing pre-consolidation price of $0.15. An alternative reading suggests 53.33 million pre-consolidation units at $0.075, which would still result in approximately 64% dilution.

The 10:1 consolidation does not appear to have been completed. No new CUSIP or ISIN was announced, and the stock price series shows no 10x adjustment, with shares trading between $0.15 and $0.45 in September and at $0.15 on October 19. Pacific Imperial stated it is reviewing strategic options but provided no revised timeline, cost-cutting details, or guidance on whether the Fenton or Babine commitments can still be met.

Pacific Imperial Mines Inc. is a Vancouver-based TSX Venture mineral exploration company with no revenue, no production and no operating cash flow. Its stated strategy is the acquisition and exploration of mineral properties in an acceptable risk environment. The company’s asset base has been shrinking rather than growing.

The company’s current focus rests on two properties held under option agreements. The Fenton Property comprises approximately 1,700 hectares, located about 30 kilometers south of Houston, B.C., and is road-accessible. It features an epithermal high-to-low sulphidation precious metal system within Kasalka formation felsic volcanics, which the company compares to Artemis Gold's Blackwater deposit. This asset is held under an option from Hudbay Minerals, announced on January 27, 2026.

The Babine Property consists of three claims totaling approximately 2,226 hectares, situated about 1.5 kilometers north of the past-producing Granisle Mine in the Babine Porphyry Belt. It targets porphyry Cu-Au-Mo deposits defined by semi-circular magnetic anomalies. This asset is held under an option agreement revised on December 22, 2025. Prior drilling at Babine intersected only sub-economic Cu-Au in semi-massive sulphides.

Other assets have been divested. The Brownell Lake VMS option with Eagle Plains Resources was terminated on October 20, 2026. The PAM Property option was terminated on October 28, 2024, according to the company’s MD&A.

Both remaining assets are early-stage exploration concepts with no defined resource. Both are optioned rather than owned, and neither has been drilled by the company under the current agreements based on the provided disclosures.