Excellon Announces Spin-Out of Saxony Silver Corp.

Excellon Resources Inc. announced a statutory plan of arrangement to spin out its majority-owned subsidiary, Saxony Silver Corp., creating a standalone company focused on silver exploration in Europe. Under the terms of the transaction, Excellon shareholders will receive Saxony Silver shares on a pro rata basis, resulting in them owning approximately 48% of the new entity, while Excellon retains a 19.9% interest.

The transaction references Saxony Silver's May 2026 financing, which established a pre-money valuation of approximately $20.8 million. Saxony Silver will be spun out with approximately C$1.8 million in cash to fund listing costs, corporate administration, and an initial target-generation program at the Silver City Project in Germany.

The spin-out requires shareholder, court, and TSX Venture Exchange approvals, with completion expected around December 23, 2026. Post-spin, Excellon will concentrate capital and management on the Mallay Mine restart in Peru and the Tres Cerros Exploration Property.

Concurrently, Excellon completed a debt settlement by issuing 1,400,000 shares at $0.495/share, subject to a four-month hold period.

Excellon Resources Inc. (EXN) is executing a spin-out of Saxony Silver, a structural corporate action following the May 2026 private placement that initially funded the German entity. The transaction is non-dilutive to Excellon shareholders, who receive direct ownership in the new entity, while Excellon retains a 19.9% interest to maintain upside exposure to the asset. This move isolates the German exploration project, which had been on hold during the Mallay Mine acquisition and restart phase, aligning with management’s strategy to focus on Peru operations while unlocking value for the Silver City Project.

The spin-out includes a C$1.8 million cash injection into Saxony Silver, sufficient for initial listing and target generation, though the subsidiary will likely require additional capital in the future, potentially leading to dilution at the Saxony Silver level. Concurrently, a debt settlement via share issuance reduces liabilities but increases the share count. The restructuring clarifies the company’s focus and capital allocation without introducing new operational or financial surprises.

Excellon Resources Inc. (EXN) is a mining and exploration company focused on silver, lead, and zinc in Peru, with additional exploration assets in Germany and Idaho. Its flagship project is the Mallay Silver-Lead-Zinc Mine in Peru, which features a fully permitted, 600 tonnes-per-day processing plant and historical production of 7.7 million ounces of silver.

The concentrator at Mallay was restarted in July 2026 for pre-commissioning. The company is targeting a ramp-up to 600 tonnes-per-day by mid-2027. Secondary assets include the Tres Cerros property, located adjacent to Mallay and targeting gold-silver epithermal deposits, the Kilgore project in Idaho, and the newly spun-out Silver City Project in Germany.