Shine Minerals Upsizes Financing to $1.5 Million

Executive Summary

• Shine Minerals Corp. announced a proposed transaction to reactivate its TSXV listing from NEX to Tier 2 Mining Issuer status through the acquisition of an option to purchase Red Cloud Silver (“RCS”), which holds an option on the Silver District Exploration Project in Arizona.
• The transaction is contingent upon a 5-for-1 share consolidation and a non-brokered private placement increasing to $1.5 million C$ at C$0.06 per pre-consolidation share.
• The deal structure involves issuing 6,500,000 post-consolidation shares to RCS shareholders for an option to acquire RCS, with a subsequent option to acquire 100% of RCS for an additional 14,200,000 shares and $650,000 cash after $2 million in exploration expenditures.

Key Details

• Transaction Structure: Shine Minerals acquires the right and option to purchase all 11,100,000 issued and outstanding shares of Red Cloud Silver (RCS) by issuing 6,500,000 post-consolidation common shares to RCS shareholders on a pro rata basis. This grants a contractual right to acquire RCS in the future rather than immediate ownership.
• Option Exercise Terms: After completing $2,000,000 in exploration expenditures on the Silver District Exploration Project within one year, Shine may exercise the option to acquire 100% of RCS by issuing an additional 14,200,000 post-consolidation shares and paying $650,000 in cash to RCS shareholders.
• Underlying Asset: RCS holds an option to acquire a 100% interest in the Silver District Exploration Project (La Paz County, Arizona) from Gulf + Western Industries, Inc.
• RCS Option Terms: RCS must make US$1.4 million in staged cash and share payments to Gulf by October 31, 2028. Gulf retains a 2% net smelter return (NSR) royalty upon exercise.
• Share Restriction: Shine will not issue more than 3,000,000 shares to Gulf (or enough to exceed 9.9% of outstanding shares) under the RCS Option Agreement.
• Financing Details:
  • Type: Non-brokered private placement.
  • Gross Proceeds: Approximately C$1,500,000 (increased from previous announcements due to investor demand).
  • Price: C$0.06 per pre-consolidation share.
  • Use of Proceeds: Transaction costs, reactivation expenses, initial exploration on the Project, and general working capital.
• Corporate Actions:
  • Share Consolidation: A 5-for-1 share consolidation will occur prior to closing.
  • Listing Status: Application submitted to TSXV for reactivation of trading from NEX to Tier 2 Mining Issuer status under TSXV Policy 2.6, Section 1.4.
• Conditions Precedent: TSXV acceptance, satisfaction of all conditions in the Definitive Agreement, completion of the consolidation, and completion of the financing.

Notable Quotes

• “Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) has reviewed or accepts responsibility for the adequacy or accuracy of this release.”