Fuerte Metals closes acquisition of Coffee project

Executive Summary

• Fuerte Metals Corp. has completed the acquisition of Goldcorp Kaminak Ltd. and the Coffee gold project in the Yukon from Newmont Corp.
• The transaction consideration included $10 million in cash, $40 million in equity (common and preferred shares), and the assumption of a $65 million intercompany note, in exchange for a 3% Net Smelter Return (NSR) royalty.
• To fund the cash portion of the deal and advance development, Fuerte raised approximately $57.5 million through a private placement of subscription receipts, which converted into units comprising common shares and warrants.

Key Details

• Acquisition Target: Goldcorp Kaminak Ltd., owner of the Coffee gold project in Canada's Yukon Territory.
• Seller: Newmont Corp.
• Transaction Consideration:
  • Cash: Approximately $10 million (U.S.) paid to Newmont.
  • Equity: $40 million (U.S.) issued in common and preferred shares to an affiliate of Newmont.
    • 22,729,126 common shares.
    • 10,842,989 preferred shares.
    • Deemed price: $1.65 per share.
  • Debt Assumption: $65 million (U.S.) intercompany note payable to Kaminak.
  • Royalty: Newmont retains a 3% Net Smelter Return (NSR) royalty on Coffee.
  • NSR Repurchase Option: Fuerte may repurchase the NSR from Newmont for $100 million (U.S.) at any time up to one year following the announcement of commercial production.
• Post-Transaction Ownership: Newmont will indirectly own 26% of the outstanding common shares on a partially diluted basis (assuming conversion of preferred shares).
• Financing for Transaction:
  • Offering Date: October 9, 2025.
  • Instrument: 34,848,485 subscription receipts of subsidiary 1555489 B.C. Ltd.
  • Price: $1.65 per subscription receipt.
  • Gross Proceeds: Approximately $57.5 million.
  • Conversion: Each subscription receipt converted into one unit (one common share + one common share purchase warrant).
  • Warrant Terms: Exercisable at $2.50 per share for five years from the closing date.
• Advisory Fees:
  • Issued 2 million units to Trinity Advisors Corp. for financial advisory services.
  • Deemed price: $1.65 per unit.
  • Warrants included: Exercisable at $2.50 per share for five years.
• Capital Structure Post-Transaction:
  • Common Shares: 120,915,268 issued and outstanding.
  • Preferred Shares: 10,842,989 issued and outstanding (non-voting, economically equivalent to common).
  • Preferred Conversion: Expected to convert to common shares on a 1:1 basis on February 14, 2026.
• Cash Position: Approximately $43 million available to advance Coffee and complete permitting.
• Strategic Rights: Newmont granted an investor rights agreement including:
  • Right to participate in securities offerings to maintain pro rata ownership.
  • Right to nominate one director to the board.
  • Information, piggy-back, and demand registration rights.
• Future Plans: Management anticipates a market update later in the quarter, including a Preliminary Economic Assessment (PEA) in the first half of 2026 and exploration/project works in Q2/Q3 2026.

Notable Quotes

• Tim Warman, President and CEO: "We are very pleased to finalize the acquisition of Coffee. Like our partners at Newmont, we welcome the opportunity to create value for communities and shareholders alike."
• Tim Warman, President and CEO: "Our ownership structure is consistent with the interests of management and the board, which collectively own approximately 5 per cent of the company following the close of the transaction."