Nord explores Title to the Metal silver financing plan

Executive Summary

• Nord Precious Metals Mining Inc. is evaluating a novel, non-dilutive financing structure titled "Title to the Metal" to fund silver production at its Castle silver mine project.
• The proposed framework involves issuing two classes of redeemable preferred shares (Class A for external investors and Class B for existing common shareholders) that represent fixed quantities of silver deliverable upon production, secured by the Castle mine resource.
• Implementation is subject to significant regulatory hurdles, including TSX-V approval, shareholder approval via a special meeting, and the completion of technical studies; no guarantee exists that the structure will be approved or implemented.

Key Details

• Financing Structure: Non-dilutive framework based on redeemable preferred shares designed to provide investors with direct exposure to silver at production cost, secured by property-specific collateral.
• Share Classes:
  • Class A: Available to general market investors at a price reflecting estimated production cost. Provides option to redeem for physical silver credit or cash at NY spot price upon meeting production milestones.
  • Class B: Available to existing common shareholders via conversion rights prior to redemption. Conversion ratio calculated by dividing per-gram production cost by the volume-weighted average trading price of Nord common shares.
• Security & Collateral: Nord intends to grant security over its 100%-owned Castle silver mine resource in Gowganda, Ontario, to secure redemption obligations.
• Production Allocation: Only a defined portion of Castle's silver production will be allocated to preferred share obligations; the majority of production and revenue remains available for common shareholders, differing from traditional streaming arrangements that claim large percentages of lifetime production.
• Redemption Terms: Preferred shares are extinguished upon redemption via physical silver delivery, cash payment, or dividend distribution.
• Evergreen Provision: Nord is evaluating an evergreen option allowing mutual extension of the program for subsequent production cycles, subject to regulatory approval.
• Regulatory Requirements:
  • Retain qualified securities counsel for documentation (articles amendment, information circular, legal opinions).
  • Hold a special meeting of shareholders to approve capital alteration.
  • Obtain conditional and final TSX-V approval for supplemental listing of Class A preferred shares.
  • Complete technical studies supporting production targets and cost estimates.
• Castle Mine Resource Data: The Castle East discovery delineated 7.56 million ounces of silver in inferred resources grading an average of 8,582 grams per tonne Ag (250.2 ounces/ton) in 27,400 tonnes of material from two sections (1A and 1B) of the Castle East Robinson zone, beginning at a vertical depth of approximately 400 metres.

Notable Quotes

• "The preferred share model provides a framework for non-dilutive mine financing that we believe can be adapted for silver production at Castle. This 'Title to the Metal' approach potentially allows us to advance production while offering investors direct participation in silver at cost, rather than spot pricing." — Frank J. Basa, President and CEO
• "The key distinction of this model is that preferred shareholders secure actual metal production rather than simply providing capital. Upon redemption, they receive either physical silver credited to their accounts or cash equivalent, making this fundamentally different from conventional equity or debt." — Frank J. Basa, President and CEO