Lion One Announces Forbearance Agreement with Senior Lender Including Extension of Repayment Date
Lion One faces deep financial distress as a $2m fee and a 31-Dec-2026 maturity deadline underscore the severity of its current liquidity challenges.
Lion One Metals Limited (LIO) has entered into a forbearance agreement with its senior secured lender, Nebari, extending the repayment deadline for Tranche 1 to December 31, 2026. The agreement allows the company to cure prior non-financial and financial defaults, including a breach of the $7 million working capital covenant, and restores the interest rate to 8% plus SOFR.
As part of the arrangement, Lion One will pay a US$2 million restructuring fee, which is reducible to US$1 million if the facility is fully repaid by September 30, 2026. The total principal outstanding under the facility is approximately US$31.2 million. The fee and cure were partially funded by the recently closed $17.5 million private placement of convertible debenture units and equity units. A formal refinancing process is currently underway.
Lion One Metals Limited (LIO) has entered into a forbearance agreement that formalizes its default on its sole senior credit facility. To cure the breach, the company executed an emergency capital raise at punitive terms, issuing 10% convertible debentures with a $0.13 conversion price and raising equity at $0.13 with $0.175 warrants. The company also agreed to pay a US$2M fee, representing roughly 6.4% of the outstanding principal, for the extension.
The agreement extends the deadline to 31-Dec-2026, providing a five-month runway, though a full refinancing remains uncertain. The significant dilution from the recent placement, along with potential further dilution if the convertible debentures convert, weighs heavily on equity holders. While the immediate risk of enforcement is lifted, the company remains in a financially precarious position with no clear path to repaying US$31.2M by year-end.
Lion One Metals Limited (LIO) is a junior gold producer operating the 100%-owned Tuvatu Alkaline Gold Project in Fiji. The project features an underground narrow-vein mine, a 300 tpd pilot plant, a tailings storage facility, and an on-site assay lab. The company holds extensive exploration ground over the Navilawa Caldera, which includes high-grade drill intercepts at depth and regional targets such as the Wailoaloa copper-gold porphyry. The mine currently lacks a feasibility study and mineral reserves.