Lion One Announces Closing of First Tranche of Non-Brokered Private Placement of Convertible Debenture Units and Units for Gross Proceeds of $15.3 Million

Lion One Metals Limited (LIO) has closed the first tranche of a non-brokered private placement, raising $15.3 million in gross proceeds. The capital was raised through a combination of high-cost convertible debentures and deeply discounted equity units. The primary purpose of the transaction is to cure a working capital covenant default and satisfy upcoming payment obligations under a senior secured loan with Nebari.

The financing structure includes $12.5 million in 10% subordinated secured convertible debenture units and $2.8 million in equity units. The equity units and debenture conversion price are set at $0.13 per share, while the associated warrants are exercisable at $0.175. Almost all proceeds are directed to the senior lender, Nebari, to cure the default, with any residual funds allocated to corporate purposes.

The transaction follows the recent appointment of Ian Berzins as CEO, marking his second time in the role within 18 months, alongside a new CFO.

Lion One Metals Limited (LIO) has confirmed a worst-case scenario for shareholders, revealing that the Nebari default issued in February 2026 remains uncured. This unresolved covenant breach necessitates an immediate capital raise. Unable to secure traditional equity at market prices or non-dilutive debt, the company was forced to issue high-coupon convertible debt and zero-premium equity accompanied by warrant sweeteners, a structure typical of distressed issuers.

The termination of the strategic partnership with Arete, which was intended to provide operational and financial stability, directly preceded the company’s operational failures and current financial crisis. The company is now in a weaker position than prior to the deal. The financing involves a conversion and equity price of $0.13, which will significantly dilute existing shareholders. Future dilution is expected if the $0.175 warrants become in-the-money.

Lion One Metals Limited (LIO) operates the Tuvatu Alkaline Gold Project in Fiji, a high-grade, narrow-vein asset characterized by world-class geology and significant drill intercepts. Despite the quality of the underlying deposit, the company has struggled to translate its geological potential into a stable, profitable, reserve-based mining operation. Lion One currently runs a sub-scale 300 tpd pilot plant and faces severe financial distress, a situation defined by repeated management failures that overshadow the asset's inherent value.