Honey Badger sees lead agent exercise placement option

Executive Summary

• Honey Badger Silver Inc. has fully exercised the over-allotment option for its brokered private placement, increasing gross proceeds to approximately $11.5 million from the sale of 71,875,000 subscription receipts.
• The net proceeds are designated to finance the cash portion of the definitive agreement to acquire Canadian Zinc Corp. and its 100% owned Prairie Creek (PC) silver project for $12 million total consideration.
• The transaction includes significant insider participation, with management, the board, and advisers expected to purchase over 10% of the offering, signaling strong confidence in the strategic acquisition.

Key Details

• Financing Structure:
  • Instrument: Subscription receipts, each priced at $0.16.
  • Total Quantity: 71,875,000 subscription receipts (following full exercise of the over-allotment option).
  • Gross Proceeds: Approximately $11.5 million.
  • Conversion: Each subscription receipt converts into one unit upon satisfaction of escrow release conditions.
  • Unit Composition: Each unit consists of one common share and one common share purchase warrant.
  • Warrant Terms: Each warrant allows the holder to acquire one additional common share for a period of three years at an exercise price of $0.24 per share.
  • Use of Proceeds: To finance the cash portion of the Prairie Creek acquisition and related expenses.
  • Escrow Arrangement: Gross proceeds less expenses and agent fees are deposited into escrow. Funds are released to the company if escrow release conditions are satisfied on or before June 15, 2026. If not satisfied by this deadline, subscription receipts are cancelled and funds returned pro rata.
  • Agent Compensation: Agents receive a 6% cash commission (50% held in escrow) and compensation warrants equal to 6% of units issued. Commission and warrants reduce to 3% for sales to the "president's list." Compensation warrants entitle holders to acquire one common share at the issue price for two years.
  • Hold Period: Securities are subject to a statutory four-month hold period.
• M&A Transaction (Prairie Creek Acquisition):
  • Target: Canadian Zinc Corp., owner of the PC silver project.
  • Seller: Resource Capital Fund VI LP (arm's-length party).
  • Consideration: $10 million in cash plus $2 million in Honey Badger shares and warrants.
  • Closing: Expected in Q2 2026, on a cash-free and debt-free basis, subject to TSX Venture Exchange acceptance and customary conditions.
• Project Assets (Prairie Creek):
  • Location: Northwest Territories, Canada.
  • Status: Permitted underground silver-zinc-lead project with existing infrastructure.
  • Historical Resource Estimate:
    • Measured & Indicated: 9.8 million tonnes at 139 g/t Ag, 9.7% Zn, 8.8% Pb (240 Moz AgEq at 766 g/t).
    • Inferred: 6.4 million tonnes at 150 g/t Ag, 12.9% Zn, 6.7% Pb (167 Moz AgEq at 813 g/t).
  • Key Attributes: Permits in place, indigenous support, multiple economic studies completed, and a 7,485-hectare land position with regional exploration potential.
• Insider Participation: Management, board, and advisers are expected to purchase over 10% of the offering.

Notable Quotes

• "We are very pleased to see strong demand for this financing, including the participation of certain insiders of the company. The agents' exercise of the overallotment option reflects a recognition of the pivotal nature of the PC silver project acquisition for Honey Badger. We believe this is one of the most compelling silver development opportunities globally, particularly in the context of current silver prices." — Chad Williams, Executive Chairman