Falco extends senior debts with OR, Glencore by 1 year

Executive Summary

• Falco Resources Ltd. has entered into binding agreements to extend the maturity dates of its senior secured convertible debt held by OR Royalties Inc. and Glencore Canada Corp. from December 31, 2025, to December 31, 2026.
• The extensions involve capitalizing accrued interest, increasing the principal amounts of both loans, and issuing new warrants to both lenders as consideration for the extension.
• The transactions are subject to minority shareholder approval (for the OR Royalties portion), TSX Venture Exchange approval, and concurrent closing on December 31, 2025.

Key Details

• OR Royalties Loan Amendment:
  • Maturity extended to Dec 31, 2026.
  • Accrued interest capitalized; new principal amount approximately $26,098,521.
  • Conversion price maintained at $0.45 per common share.
  • Interest rate maintained at 9%.
  • Existing warrants (17,690,237 warrants, exercise price $0.58, expiring Dec 31, 2025) remain outstanding.
  • New warrants issued: 19,332,237 warrants, exercisable from Jan 1, 2026, at an exercise price of $0.58 per common share, expiring Dec 31, 2026.
• Glencore Debenture Amendment:
  • Maturity extended to Dec 31, 2026.
  • Accrued interest capitalized; new principal amount approximately $15,433,754.
  • Conversion price maintained at $0.37 per common share.
  • Interest rate maintained at 10%.
  • Existing warrants (19,424,944 warrants) remain outstanding until Dec 31, 2025.
  • New warrants issued: 21,381,422 warrants total, expiring Dec 31, 2026.
    • 15,061,158 warrants exercisable at $0.38 per common share.
    • 6,320,264 warrants exercisable at $0.42 per common share.
• Transaction Conditions:
  • OR Royalties transactions require minority shareholder approval (excluding directors/officers of OR Royalties) at a special meeting on Dec 15, 2025.
  • Both transactions require TSX Venture Exchange approval.
  • Closing is conditional on the concurrent closing of both sets of amendments and warrant issuances.
  • Expected closing date: Dec 31, 2025.
• Shareholder Impact (OR Royalties):
  • Pre-transaction ownership: ~17.01% (partially diluted basis).
  • Post-transaction ownership: ~18.30% (partially diluted basis), representing beneficial ownership or control over 77,328,950 common shares.
• Related Party Status:
  • OR Royalties transactions are considered related party transactions under Regulation 61-101.
  • Exempt from formal valuation requirements but requires minority approval.

Notable Quotes

• "The concurrent extensions of the corporation's senior debts demonstrate the strong relationship and long-standing support of OR Royalties and Glencore to Falco and the development of the Horne 5 project. Such extensions provide the corporation with additional flexibility to pursue the permitting and development of the Horne 5 project." — Luc Lessard, President and CEO