Pasinex completes agreement with Kurmel Holding

Executive Summary

• Pasinex Resources Ltd. has executed an agreement to acquire the remaining 50% ownership of Horzum A.S. from Kurmel Holding, achieving 100% consolidation of the Turkish entity.
• The transaction is contingent on approval from Turkey's General Directorate of Mining and Petroleum Affairs (MAPEG) and customary corporate registrations.
• The deal includes specific production-linked payments, equipment allocations, and a full settlement waiving all other receivables and claims between the parties.

Key Details

• Transaction Structure: Kurmel Holding (comprising Kurmel Holding A.S., Akmetal Dis Ticaret Madencilik Sanayi ve Ticaret A.S., Akmetal Madencilik Sanayi ve Ticaret A.S., and Birant Kurmel) transfers its 50% shareholding in Horzum A.S. to Pasinex Arama ve Madencilik A.S.
• Assets Acquired: Upon completion, Pasinex Arama will own 100% of Horzum A.S., which includes the Pinargozu zinc mine and the Akkaya and Mahyalar licences in Turkey.
• Production-Linked Payments: Pasinex Arama will pay Kurmel Holding only if production of lead-zinc ore with a grade greater than 30% (suitable for direct sale) is achieved:
  • $600,000 USD upon production of 10,000 tonnes.
  • $1,000,000 USD upon cumulative production of 20,000 tonnes.
  • Volumes are determined by quantities declared to state authorities; no payments are due if economic production or grade targets are not met.
• Equipment Allocation: Equipment belonging to Horzum A.S. will be split. Equipment essential to mining operations remains with Horzum A.S., while other equipment is transferred to Kurmel Holding.
• Land Transfer: Three parcels of land in front of licence No. 541 are transferred for a fee of $10,000 USD, satisfied by the transfer of equipment to Kurmel Holding.
• Full and Final Settlement: Kurmel Holding waives all other receivables and claims against Horzum A.S., Pasinex Arama, and Pasinex Resources. Conversely, Pasinex Arama has no receivables or claims against Kurmel Holding upon completion.
• Strategic Rationale: The consolidation aims to streamline decision-making, support exploration/production at Pinargozu, and facilitate underground access to the Akkaya licence from existing workings.
• Operational Context: Management notes that underground drilling suspended in 2024 had intercepted a new mineralization zone 60 metres below the lowest working level at Pinargozu. Work will resume to delineate this zone and complete the decline. Additionally, work will resume at the Akkaya licence where an adit has been completed to the property boundary.

Notable Quotes

• Dr. Larry Seeley, Executive Chairman: "This agreement is a decisive step toward full ownership of Horzum A.S., aligning payments to performance and clearing a path for continued exploration and production at Pinargozu. Importantly, it also facilitates underground access to Akkaya, enhancing our ability to advance that property. Together with our recent debt conversion and progress at Sarlkaya, this settlement removes legacy uncertainty in Turkiye and positions Pasinex for sustainable growth and long-term value creation for our shareholders."
• Jonathan Challis, Chairman of Horzum A.S.: "With the signing of this agreement, we are looking forward to resuming exploration and development at Pinargozu, where past operations have proven the potential to produce low-cost, high-grade direct shipping ore... We believe that the combination of three licences now under Horzum's full control, two of which, Pinargozu and Sarikaya, have a history of profitable production, augurs well for the future success of Pasinex."