Thunder Mountain, MFD sign small-scale production deal

Executive Summary

• Thunder Mountain Gold Inc. (THMG) entered a small‑scale production agreement with MFD Investment Holdings SA, under which MFD will finance 100 % of the qualifying capital required to commence small‑scale production at the South Mountain project.
• Revenue from small‑scale production will be allocated 80 % to MFD and 20 % to THMG until MFD recovers 1.5 × its capital contribution; thereafter revenues split 50/50 until 1.5 million tonnes are mined, after which all revenue reverts to THMG.
• The existing option agreement is unchanged except that the earn‑in deadline for MFD to acquire a 10 % equity interest by spending US$1 million has been extended to October 31 2026.

Key Details

• Operator: Thunder Mountain Gold retains operator status for the South Mountain project.
• Financing Commitment: MFD will provide all qualifying capital needed to achieve small‑scale production (exact amount not disclosed).
• Revenue Waterfall:
• Phase 1 – Until MFD recovers 1.5 × its qualified capital: 80 % of revenues to MFD, 20 % to THMG.
• Phase 2 – After pay‑back, until cumulative production reaches 1.5 million tonnes: 50/50 split.
• Phase 3 – Post‑production cap: 100 % of revenues to THMG.
• Term / Production Cap: Agreement terminates at the earlier of ten (10) years or 1.5 million tonnes of cumulative economic ore mined.
• Option/Earn‑In Rights:
• MFD may earn a 10 % equity stake in South Mountain Mines Inc. by incurring US$1 million of exploration expenditures.
• Earn‑in deadline extended to October 31, 2026 (originally earlier).
• All approved project expenditures count toward the $1 M threshold.
• Permitting & Approvals: Implementation remains subject to permitting, definitive budgets and customary corporate approvals.
• Technical Review: Technical information reviewed and approved by Tyson Forbush, CPG, consulting geologist (qualified person under NI 43‑101).
• Project Background: South Mountain is a polymetallic historic mine with average historical grades of 14.5 % Zn, 363 g/t Ag, 1.98 g/t Au, 1.4 % Cu and 2.4 % Pb; THMG has invested approximately US$25 M to date.
• Strategic Rationale (as stated by CEO Eric T. Jones): Non‑dilutive financing preserves balance sheet integrity, provides early cash flow, retains operator control, and allows focus on exploration while generating revenue from small‑scale production.

Notable Quotes

“Advancing selective small‑scale production without issuing equity keeps our balance sheet intact, creates positive cash flow and positions the company to pursue resource growth. We believe this combination of non‑dilutive funding, operator control and continued exploration focus best supports shareholder value over time,” – Eric T. Jones, President & CEO, Thunder Mountain Gold Inc.