Lion One receives conditional OK for private placement

Executive Summary

• Lion One Metals Ltd. has received conditional approval from the TSX Venture Exchange for a non-brokered private placement financing with Arete Capital Advisor Pty. Ltd., with an anticipated closing date of March 27, 2026.
• The financing involves the issuance of 44,264,800 units at 34 cents per unit, generating gross proceeds of approximately $15.05 million.
• Proceeds are designated to address critical operational constraints at the Tuvatu alkaline gold project in Fiji, including mill throughput improvements, flotation circuit upgrades, and underground development, as well as to provide working capital cushion for a senior debt facility maturing in August 2026.
• Concurrent with the closing, Lion One will enter into an Investor Rights Agreement and a Management Services Agreement with Arete, granting Arete board nomination rights and operational oversight responsibilities for a total potential compensation package of up to $1.5 million annually plus equity incentives.

Key Details

• Transaction Structure: Non-brokered private placement pursuant to a subscription agreement dated Dec. 30, 2025.
• Investor: Arete Capital Advisor Pty. Ltd.
• Units Issued: 44,264,800 units.
• Price Per Unit: 34 cents.
• Gross Proceeds: $15,050,032.
• Warrant Terms: Each unit includes one common share purchase warrant, exercisable at 39 cents per share for a period of three years following closing.
• Pro Forma Ownership: The common shares represent 9.9% of the company's outstanding common shares on a pro forma basis (excluding warrant exercises). Arete and its principals hold no other securities of Lion One.
• Use of Proceeds:
  • Improvements in mill throughput capacity.
  • Flotation circuit upgrades to achieve higher recovery rates.
  • Underground development headings to access higher-grade zones.
  • Investments in mining equipment.
  • Working capital cushion for senior debt facility covenants.
• Debt Context: Senior debt facility matures in August 2026, creating an urgent cash flow imperative.
• Investor Rights Agreement Terms:
  • Arete has the right to designate one nominee to the board of directors (Campbell Olsen, CEO) as long as ownership is at least 9.9%.
  • Board size cannot be increased above five members without Arete's consent while the threshold is met.
  • Pre-emptive rights to maintain pro rata interest in future offerings (with standard exceptions for employee plans, existing securities, stock splits, M&A consideration, and underwriter compensation).
  • Arete agrees to vote in favor of management-recommended director nominees and align voting with management recommendations on other proposals.
  • TSX-V disinterested shareholder approval required if Arete holds more than 20% of outstanding shares.
• Management Services Agreement Terms:
  • Arete provides management and advisory services for the Tuvatu project, including operational coordination, personnel designation, and budget review.
  • Arete reports to the Board of Directors; Board retains overall oversight.
  • Contracting Limit: Arete cannot enter into contracts outside the approved business plan, exceeding $150,000, or materially affecting project ownership without Board approval.
  • Compensation:
    • Base Management Fee: $750,000 per 12-month period.
    • Incentive Compensation: Up to $375,000 per year based on Key Performance Indicators (KPIs), potentially payable in shares.
    • Performance Options: Four million performance options exercisable at 40 cents for five years.
    • Performance Share Units: Four million performance share units for each payment period.
  • Term: Initial five-year term, renewable by mutual agreement.
  • Termination: Company may terminate for default or at discretion with a termination fee equal to two times the annual management fee ($1.5 million).
• Board Appointment: Campbell Olsen was appointed as a director on Feb. 25, 2026.

Notable Quotes

• None explicitly quoted in the text, though the release details the strategic rationale for the financing and the operational role of Arete.