Highland Copper closes sale of 34% of White Pine

Executive Summary

• Highland Copper Company Inc. has completed the sale of its 34% non-controlling interest in the White Pine North project to joint venture partner Kinterra Copper USA LLC for a total consideration of $30.1 million (U.S.).
• The transaction proceeds are designated to eliminate existing debt to Kinterra, finance general working capital, and fund planned activities for the company's 100%-owned Copperwood project, specifically aiming to reach a construction decision.
• Concurrently, Highland Copper amended its silver royalty option with OR Royalties Inc., allowing OR Royalties the option to increase its silver net smelter return royalty from 11.5% to 100% by paying $3.0 million on Dec. 31, 2027.

Key Details

• Transaction Structure: Sale of 34% interest in White Pine North project to Kinterra Copper USA LLC.
• Total Consideration: $30.1 million (U.S.).
• Payment Composition:
  • $18.3 million (U.S.) in cash.
  • $11.8 million (U.S.) applied as netting against outstanding principal and accrued interest on a loan previously made by Kinterra to Highland Copper’s subsidiary, Upper Peninsula Copper Holdings Inc.
• Use of Proceeds:
  • Eliminate existing debt to Kinterra.
  • Pay transaction costs.
  • Finance general working capital.
  • Finance planned Copperwood project activities (detailed engineering, construction readiness, and project financing).
• Strategic Context: CEO Barry O'Shea stated the divestment demonstrates a focus on the 100%-owned Copperwood project and aims to capitalize it toward a construction decision.
• Concurrent Agreement (Silver Royalty):
  • Amendment to silver royalty option with OR Royalties Inc. on the Copperwood project.
  • OR Royalties has the option to increase its net smelter return (NSR) royalty on silver from 11.5% to 100%.
  • Option exercise price: $3.0 million (U.S.).
  • Payment deadline: Dec. 31, 2027 (with a one-year extension right for OR Royalties).
  • Terms are generally consistent with the existing silver royalty option.
• Advisers:
  • Financial Adviser: Moelis & Company LLC (exclusive).
  • Legal Adviser: McMillan LLP.
• Administrative Note: The company refiled interim financial statements for the three and six months ended Dec. 31, 2025, on Feb. 26, 2026, to correct comparative financial information in the statement of changes in equity.

Notable Quotes

• "In divesting our non-controlling stake in White Pine, we are pleased to demonstrate a clear focus on our 100-per-cent-owned, fully permitted Copperwood project," said Barry O'Shea, chief executive officer of Highland Copper. "The divestment serves to eliminate debt and capitalize Copperwood to a construction decision. With the proceeds, we look forward to progressing detailed engineering, construction readiness and project financing through 2026."