Denarius JV launches $20-million (U.S.) note offering

Executive Summary

• Denarius Metals Corp.'s joint venture, Rio Narcea Recursos S.A. (RNR), has launched a US$20 million best-efforts offering of 12% secured notes to fund the restart of the Aguablanca nickel-copper project in Spain.
• The offering involves the sale of up to 20,000 notes at $1,000 each, with closing anticipated in tranches on or before February 27, 2026. Proceeds will finance capital expenditures for mine restart (dewatering, rehabilitation) and working capital, including a 12-month interest escrow.
• RNR aims to resume underground mine production by Q4 2026, contingent on funding. The project is fully permitted, featuring a 5,000 tpd processing plant, with a pre-existing offtake agreement with Boliden for 100% of concentrate production.

Key Details

• Financing Structure:
  • Issuer: Rio Narcea Recursos S.A. (RNR), a joint venture owned 22.1% by Denarius Metals Corp.
  • Instrument: 12% secured notes.
  • Gross Proceeds: Up to US$20,000,000.
  • Quantity: Up to 20,000 RNR notes.
  • Price: US$1,000 per note.
  • Arrangers: SCP Resource Finance LP and ECM Capital Advisors Ltd.
  • Closing: Anticipated in one or more tranches on or prior to Feb. 27, 2026.
• Note Terms:
  • Maturity: 5 years from issuance.
  • Interest: 12% per annum, paid quarterly in arrears (March, June, September, December), commencing March 31, 2026.
  • Escrow: A portion of gross proceeds is set aside in escrow to finance monthly interest payments for the first 12 months.
  • Principal Repayment: No scheduled principal repayments required within the first 12 months.
  • Early Repayment: Holders may request repayment of up to US$250 per note without penalty on the second anniversary.
  • Redemption: RNR may redeem notes in part or full without penalty on the third anniversary; unredeemed notes are repaid in full at maturity.
  • Security: Non-recourse to Denarius Metals; secured solely by a first-ranking charge on RNR assets (processing plant, mining rights, offtake agreements).
• Use of Proceeds:
  • Capital expenditures for start-up activities at Aguablanca, including dewatering to access the underground mine and underground mine rehabilitation.
  • Working capital purposes, including the 12-month interest escrow.
• Project Status & Timeline (Aguablanca):
  • Goal: Resume underground mine production by Q4 2026.
  • Processing Plant: 5,000-tonne-per-day turnkey facility. Phase 1 detailed assessment completed in 2025 with METSO Spain S.A. Phases 2 (reconditioning) and 3 (commissioning) expected to be financed by METSO and executed by a Portuguese maintenance company. Estimated duration: no longer than 8 months.
  • Dewatering: Activities commenced in 2025 with forced evaporation systems. Design/engineering complete. Execution by an Andalusian specialist. Estimated duration: no longer than 6 months, commencing once financing is arranged.
  • Infrastructure: Arrangements with Endesa for underground electrical connections. Ventilation, ramp access, and power assessments to follow dewatering. New escapeway construction to follow main ramp dewatering.
• Commercial Agreements:
  • Offtake: 2024 agreement with Boliden Commercial AB for the sale of 100% of concentrates at market prices.
  • By-Products: Payment for contained gold, silver, platinum, palladium, and cobalt.
  • Logistics: Shipment via Huelva Port to Boliden’s smelter in Harjavalta, Finland.
• Insider Participation:
  • Serafino Iacono, Executive Chairman of Denarius Metals, intends to participate in the offering for US$2.0 million in gross proceeds.
  • Completion is subject to third-party approvals.