Homerun signs 99-year Brazil surface rights deal

Executive Summary

• Homerun Resources Inc. has signed a definitive 99-year surface rights agreement for 64 hectares in Santa Maria Eterna, Bahia, Brazil, to facilitate the installation of its silica processing plant and solar glass manufacturing facility.
• The agreement replaces a previous municipal land donation and Memorandum of Understanding (MoU), eliminating the risk of land reclamation and removing obligations under the prior MoU terms.
• The Municipality of Belmonte has committed up to $400,000 USD toward infrastructure improvements, specifically paving approximately five kilometers of road connecting the project site to the BR-101 federal highway.

Key Details

• Agreement Structure: 99-year surface rights agreement (Direito Real de Superficie), automatically renewable for an additional 99 years unless either party objects five years prior to expiration.
• Location: Centro Industrial Sao Jose da Silica, Fazenda Sao Jose, Santa Maria Eterna, Belmonte, Bahia, Brazil.
• Area: 64 hectares, contiguous to highway BA982 and the company's SME Silica resources.
• Purpose: Construction of an industrial complex for processed silica, solar glass, storage, logistics, R&D, and commercial activities.
• Legal Security: Irrevocable transfer of surface rights; protected against changes in underlying land ownership; right of first refusal if landowners sell or lease.
• Financing Utility: Surface rights can be used as collateral for project financing; company can independently secure permits and licenses.
• Compensation Terms:
  • Payments begin in 2027.
  • Fixed payment of 60,000 Brazilian Reals due June 30, 2027.
  • Monthly payments of 50,000 Brazilian Reals starting January 2028.
  • Payment reduction clause: If construction has not started by January 2028 for reasons beyond Homerun's control, monthly payments are reduced by 50% until construction begins.
  • Annual inflation adjustment using the IPCA index.
• Municipal Support: Municipality of Belmonte provides a letter of support and allocates up to $400,000 USD for paving ~5km of road to BR-101, part of a broader state infrastructure program.
• Strategic Impact: Removes risk of land reclamation, facilitates fast-tracking of the bankable feasibility study, and aligns with the strategy to establish the full silica value chain (resource to high-value product).

Notable Quotes

• Brian Leeners, CEO: "We wish to thank the parties to the original MoU and the landowner for helping to get this key deliverable completed in a timely manner before the pending receipt of our bankable feasibility study and financing of the industrial plants... The signing of this new agreement aligns with the execution of the company's strategy to develop and construct Homerun's silica processing and solar glass manufacturing facilities... ensuring the establishment of the entire silica value chain... maximizing both the socioeconomic and environmental benefits for the people of the state of Bahia."