Tincorp signs definitive agreement for Santa Barbara

Executive Summary

• Tincorp Metals Inc. entered into a definitive share purchase agreement to acquire the Santa Barbara gold-copper project in Ecuador from Silvercorp Metals Inc. and its subsidiary Adventus Mining Corp.
• The acquisition is funded via a combination of equity issuance (15 million shares) and cash payments totaling $19.5 million (CAD 6M + USD 13.5M), alongside a concurrent best-efforts private placement raising up to C$16 million.
• The transaction is classified as a related-party transaction requiring minority and disinterested shareholder approval, with closing expected by the end of April 2026.

Key Details

• Acquisition Target: 100% interest in Santa Barbara Metals Inc., holding the Santa Barbara gold-copper project in the Zamora-Chinchipe province, southeastern Ecuador.
• Transaction Consideration:
  • Equity: 15 million common shares of Tincorp at a deemed price of C$0.40 per share (Total: C$6 million).
  • Cash: USD 13.5 million paid in four instalments:
    • USD 1.5 million upon closing.
    • USD 2.5 million on the first-year anniversary.
    • USD 4.0 million on the second-year anniversary.
    • USD 5.5 million (cash or shares at vendor's election) on the third-year anniversary (minimum share price C$0.40).
  • Royalty: Vendors receive a 1.5% Net Smelter Return (NSR) royalty; Tincorp has the option to repurchase 1.0% of this NSR for USD 10 million.
• Concurrent Financing:
  • Total Gross Proceeds: Up to C$16 million.
  • Brokered Portion: Up to C$10 million via Raymond James Ltd. (25 million subscription receipts at C$0.40 each).
  • Non-Brokered Portion: Approximately C$6 million in subscription receipts on the same terms.
  • Instrument Terms: Each subscription receipt converts into one unit (one common share + 0.5 warrant).
  • Warrant Terms: Exercise price of C$0.65 per share, exercisable for 24 months from closing.
  • Commission: 6% cash commission on brokered proceeds (50% paid at closing, 50% from escrow upon acquisition closing). Compensation warrants equal to 6% of brokered receipts issued to agents.
  • Finder Fees: Up to 6% on non-brokered proceeds (50% at closing, 50% from escrow).
  • Escrow: 50% of brokered gross proceeds plus agent expenses held in escrow, released upon satisfaction of acquisition closing conditions.
• Project Overview:
  • Location: ~76 km east of Zamora, Ecuador. Low elevation (1,000–1,100 m).
  • Concessions: Six concessions covering 52 sq km with valid environmental permits for exploration/drilling.
  • Geology: Alkalic basaltic andesite and porphyritic diorite dikes. Mineralized zone is 1.2 km N-S, 500 m E-W, extending >500 m depth. Open in all directions.
  • Historical Drilling: 22,027 m in 56 holes (1999–2018).
  • Next Steps: Mobilization of three drill rigs for a 10,000 m Phase 1 program to confirm historical results, infill drill, and obtain core for metallurgical testing.
• Regulatory & Approval Requirements:
  • Requires TSX-V approval.
  • Requires shareholder approval at a special meeting (minority approval and disinterested shareholder approval) due to related-party status (Silvercorp owns ~29.1% and CEO Rui Feng is a director).
  • Relies on exemption from formal valuation requirements under MI 61-101 Section 5.5(b).
• Timeline:
  • Financing expected to close by mid-March 2026.
  • Acquisition expected to close by end of April 2026.
  • Hold period for securities: 4 months and 1 day following offering closing.