San Lorenzo names Argonaut adviser, arranges placement

Executive Summary

• San Lorenzo Gold Corp. has entered into an advisory engagement with Argonaut Corporate Finance Ltd. and announced a non-brokered best-efforts private placement of units for up to $4 million, with Argonaut participating as a cornerstone investor for $2 million.
• The company is converting existing credit facilities with Tailwind Capital and repaying a term loan with Lithium Chile Inc. as part of the financing structure, while simultaneously providing an update on ongoing drilling at the Salvadora project.
• The proceeds from the private placement will be used to continue exploration at the flagship Salvadora property and for general working capital, ensuring funding for drilling activities well into 2026.

Key Details

• Advisory Engagement:

  • San Lorenzo entered into an advisory agreement with Argonaut Corporate Finance Ltd. (part of Argonaut Ltd.) for an initial term of six months, extendable by mutual agreement.
  • Argonaut will serve as strategic financial adviser, providing guidance on exploration efforts and interpretation for the Salvadora gold/copper project, as well as the Punta Alta and Nancagua properties in Chile.
  • Compensation includes a monthly fee of $5,000 and the grant of 1,000,000 warrants to Argonaut.
  • Each advisory warrant entitles Argonaut to acquire one common share at $0.80 per share for a period of two years.

• Private Placement Details:

  • Structure: Non-brokered best-efforts private placement of units.
  • Gross Proceeds: Up to $4,000,000.
  • Price: 62 cents per unit.
  • Unit Composition: One common share and one-half of a common share purchase warrant.
  • Warrant Terms: Each full warrant entitles the holder to acquire one additional common share at $0.80 per share for two years from issuance.
  • Acceleration Clause: The company may accelerate warrant expiry to 60 days after the date common shares trade at a volume-weighted average price exceeding $1.10.
  • Cornerstone Investment: Argonaut Group will invest $2,000,000 as the cornerstone investor.
  • Broker Fees: San Lorenzo may pay qualified non-related parties a commission/finder's fee of up to 6% of gross proceeds, payable in cash and warrants (representing 6% of common shares issued). Broker warrants allow purchase of one share at $0.80 for 12 months. Argonaut waives entitlement to broker warrants on its lead-order subscription but receives the cash fee.
  • Investor Type: Accredited investors or other qualified investors under prospectus exemptions.
  • Hold Period: Statutory hold period of four months and one day following closing.
  • Minimum Offering: None specified; insiders may participate.

• Use of Proceeds:

  • Continue exploration efforts on the Salvadora property.
  • General working capital purposes, including offering expenses.

• Conversion of Credit Facilities (Tailwind Capital Neo Fund Ltd.):

  • Tailwind Capital, associated with CEO Al Kroontje, agreed to convert all advances from two credit facilities into common shares.
  • First Facility: $1,000,000 in outstanding advances converted at $0.20 per common share. This facility was used for drilling between December 2024 and February 2025.
  • Second Facility: $235,190 in currently drawn advances converted at $0.35 per common share. This facility funded the current drilling program.
  • Result: No advances will remain outstanding under either facility upon closing of the offering.

• Repayment of Term Loan (Lithium Chile Inc.):

  • Principal Amount: $1,000,000.
  • Accrued Interest: Approximately $240,000.
  • Settlement Method:
    • 50% of indebtedness satisfied by issuing units to the lender at the offering price of $0.62 per unit.
    • Remaining 50% of indebtedness repaid in cash from the proceeds of the offering.

• Drilling Update:

  • San Lorenzo is currently drilling a fourth hole on its Cerro Blanco porphyry target at the Salvadora project.
  • Initial mechanical problems with the drilling rig have been rectified.
  • Initial results are expected to be received in January 2026.

Notable Quotes

• Eddie Rigg, Argonaut Executive Chairman: "Argonaut is delighted to be cornerstoning the offering and accepting the advisory engagement. We scour the globe seeking to identify world-class projects that are underappreciated and mispriced. We have completed separate technical reviews with our in-house geologists. We are convinced Salvadora has the strong potential to host a multimillion-ounce gold resource."
• Al Kroontje, San Lorenzo CEO: "We are pleased to have Argonaut's support and look forward to their continued involvement with San Lorenzo as the company continues the evaluation and interpretation of ongoing drilling, IP, and surface geochem efforts at Salvadora. Drilling is ongoing on this exciting project. At the suggestion of numerous stakeholders, together with the fact that the existing (second) credit facility will not provide sufficient funding of much warranted continuous drilling at Salvadora, management has determined that it is in the best interests of our stakeholders to complete a financing that will enable drilling to continue well into 2026."