CVW Sustainable to get $50M from investor Fairfax

Executive Summary

• CVW Sustainable Royalties Inc. announced a $50-million strategic investment from Fairfax Financial Holdings Ltd. and an upsizing of its previously announced brokered private placement from $25-million to $50-million, resulting in $100-million in total gross proceeds.
• The Fairfax investment involves the issuance of voting and non-voting common share units at 78 cents per unit, including warrants exercisable at 95 cents.
• The upsized brokered private placement will issue up to 64,102,564 units at 78 cents per unit, also including warrants exercisable at 95 cents.
• Proceeds will be used to finance future royalty transactions, due diligence, and general corporate purposes.

Key Details

• Total Financing: $100-million in total gross proceeds ($50-million from Fairfax strategic investment + $50-million from upsized private placement).
• Fairfax Strategic Investment Structure:
  • Tranche 1: 54,600,712 Fairfax voting units at 78 cents per unit for gross proceeds of ~$42,588,555. Each unit consists of one common share and one warrant to purchase a non-voting common share at 95 cents, exercisable for two years.
  • Tranche 2: 9,501,852 Fairfax non-voting units at 78 cents per unit for gross proceeds of ~$7,411,445. Each unit consists of one non-voting common share and one non-voting common share warrant.
  • Conversion: Non-voting shares are convertible to common shares, subject to a 19.9% beneficial ownership restriction.
  • Warrant Acceleration: If VWAP exceeds $1.20 for 30 consecutive trading days (after 6-month anniversary), company may accelerate warrant expiry to 30 days after notice.
• Upsized Private Placement Structure:
  • Quantity: Up to 64,102,564 units.
  • Price: 78 cents per brokered unit.
  • Gross Proceeds: Up to $50-million.
  • Components: Each unit consists of one common share and one common share purchase warrant.
  • Warrant Terms: Exercisable to purchase an additional common share at 95 cents per warrant for two years from closing.
  • Warrant Acceleration: Same acceleration provision as Fairfax warrants (VWAP > $1.20 for 30 consecutive days after 6-month anniversary).
• Use of Proceeds: Finance future royalty transactions, diligence and closing expenses, and general corporate purposes.
• Closing Dates:
  • Upsized offering: On or about Feb. 26, 2026.
  • Fairfax strategic investment: On or about April 7, 2026 (subject to shareholder approval and closing of upsized offering).
• Regulatory/Shareholder Matters:
  • Special meeting of shareholders to be called to amend articles to create non-voting common shares.
  • Four-month-and-one-day statutory hold period on all securities.
  • Conditions include TSX Venture Exchange approval and, for Fairfax, shareholder approval and minimum $50-million gross proceeds from the upsized offering.
• Agent: Stifel Nicolaus Canada Inc. (lead agent and co-bookrunner).

Notable Quotes

• "This will provide the company with $100.0-million in total gross proceeds to deploy in its royalty investment strategy and provides a strong endorsement of this strategy from Fairfax as well as other investors."
• "The strategic participation from Fairfax, provides critical capital at an inflection point for the company and reflects confidence in the company's sustainability-focused royalty investment strategy, disciplined capital allocation approach and growing pipeline of royalty opportunities."