Denarius obtains industrial facility permit for Zancudo

Executive Summary

• Denarius Metals received the final industrial facility permit for its Zancudo project in Colombia, enabling the commencement of construction on a 1,000 tonnes per day processing plant.
• The company expects to begin producing high-grade gold-silver concentrates before the end of the second quarter of 2026.
• Receipt of the permit triggers the release of the second $2.5-million advance from Trafigura under a $9.0-million prepayment facility, while early production activities continue to generate operating cash flow.

Key Details

• Permitting: Received approval of the industrial facility permit from Corantioquia (local environmental authority) for the Zancudo project; the permit has a term of 30 years.
• Construction & Timeline: Commencing construction of a 1,000-tonne-per-day processing plant; all equipment is located at the project site with a local contractor engaged; operations expected to start before the end of Q2 2026.
• Financing: Receipt of the permit enables the company to receive the second advance of $2.5 million (U.S.) from Trafigura Pte. Ltd. under a $9.0 million (U.S.) prepayment facility financing the completion of Zancudo project construction.
• Offtake Agreement: Concentrates will be sold under an existing offtake agreement with Trafigura Pte. Ltd.
• Early Production Status (Through Sept 2025):
  • Mining operations commenced in April 2025.
  • Approximately 1,200 tonnes mined in Q2 and Q3 2025; 878 tonnes shipped to Trafigura.
  • Shipped material grades averaged 7.3 g/t gold and 164.5 g/t silver.
  • Shipped material contained approx. 207 ounces of gold and 4,641 ounces of silver.
  • Received payment for approx. 126 ounces of gold and 1,694 ounces of silver.
  • Early production payability rates: 55%-70% for gold and 30%-40% for silver (reflecting additional costs for raw material processing).
  • Future concentrate payability rates (post-processing plant): 86%-90% for gold and 35%-45% for silver.
• Strategic Context: Early production generates operating cash flow while mine contractor prepares the mine for semi-mechanized mining to feed the new processing plant.

Notable Quotes

• "We are excited to reach this very important milestone for our company. With this permit now in hand, we are able to commence construction of our new processing plant. All equipment for the processing plant is located at the project site, and we have engaged a local contractor to carry out the construction activities that are expected to have the processing plant in operation before the end of the second quarter of 2026. In the meantime, we will continue our early production activities, which are generating some production and operating cash flow, while our mine contractor carries out development to prepare the mine for semi-mechanized mining to feed the new processing plant." — Serafino Iacono, Executive Chairman