Sierra Madre Gold closes first tranche of offering

Executive Summary

• Sierra Madre Gold and Silver Ltd. has closed the first tranche of its $50 million brokered private placement, raising approximately $39.7 million in gross proceeds.
• The financing is directly linked to the company's proposed acquisition of the Del Toro silver mine from First Majestic Silver Corp., with proceeds intended to finance the transaction and subsequent exploration/development.
• Funds are held in escrow pending the satisfaction of regulatory and corporate approvals, with a deadline of May 14, 2026, for release to the company.

Key Details

• Transaction Structure: Brokered private placement pursuant to an agency agreement dated Jan. 14, 2026.
• First Tranche Closing:
  • Gross Proceeds: $39,678,241.20.
  • Units Issued: 30,521,724 subscription receipts.
  • Price: $1.30 per subscription receipt.
  • Agents: Beacon Securities Ltd. (lead agent/sole bookrunner), Canaccord Genuity Corp., BMO Capital Markets, and VSA Capital Ltd.
• Escrow Arrangement:
  • $38,568,280.26 (gross proceeds less 50% of agents' fees and certain expenses) placed into escrow.
  • Release Conditions: Receipt of all required corporate, shareholder, and regulatory approvals.
  • Deadline: May 14, 2026, at 5 p.m. Toronto time.
  • Failure to Close: If conditions are not met by the deadline, proceeds (plus interest, net of withholding tax) are returned to subscription receipt holders, and receipts are cancelled.
  • Agent Fees: Remaining 50% of agents' fees ($1,023,513.03) plus interest released to agents upon successful escrow release.
• Use of Proceeds:
  • Finance completion of the Del Toro acquisition.
  • Exploration and development of Del Toro post-acquisition.
  • General working capital.
• Second Tranche: Company intends to close a second tranche, including the full exercise of the agents' option.
• Agent Compensation:
  • Cash Fee: $2,032,276.06 paid in cash, with 50% placed into escrow.
  • Options: 1,562,366 compensation options issued to agents.
  • Option Terms: Exercise price at issue price ($1.30), term of 24 months from closing.
• Related Party Transaction:
  • Directors and officers subscribed for 219,250 subscription receipts.
  • Aggregate Proceeds from Insiders: $285,025.
  • Regulatory Exemption: Relied on exemptions from formal valuation and minority shareholder approval under MI 61-101 as the fair market value of insider subscriptions does not exceed 25% of market capitalization.
• Securities Restrictions: Four-month hold period from the date of closing, plus applicable legal restrictions.
• Regulatory Status: Subject to final approval of the TSX Venture Exchange.
• Context: Offering conducted in conjunction with the proposed acquisition of the Del Toro silver mine in the Chalchihuites district, Mexico, from First Majestic Silver Corp.

Notable Quotes

• None provided in the text.