South Atlantic arranges $4M financing, debt settlement

The most recent news release, dated February 13, 2026, announces a dual transaction: - A non-brokered private placement to raise C$4.0 million by issuing 80 million common shares at C$0.05 per share. - A debt settlement agreement to extinguish a C$500,000 loan (principal and accrued interest) by issuing 10 million shares at the same C$0.05 price. Both transactions involve related parties (insiders and the non-arm's length lender) and rely on MI 61-101 exemptions. The proceeds are intended to advance the Pedra Branca project in Brazil and for general corporate purposes. Exchange approval is pending.

This news is materially positive as it directly addresses the company's critical financial distress. The company's last reported cash (Nov 30, 2025) was C$213,514 with a C$513,393 loan payable, resulting in negative working capital. The C$4.5 million total infusion (C$4M new cash, C$0.5M debt conversion) provides a necessary lifeline to fund operations and exploration, while converting a short-term liability (with 8% interest) into equity preserves scarce cash. However, the financing price of C$0.05 represents a 28.6% discount to the recent C$0.07 trading price, and the significant dilution (90 million new shares, increasing the share count by ~82%) is a negative trade-off. The involvement of insiders signals confidence but also highlights the difficulty in attracting arm's-length capital, especially following the failed merger with Valore Metals in mid-2025.

South Atlantic Gold Inc. is a Canadian junior exploration company focused on the Pedra Branca project in Ceará State, Brazil. The project is a district-scale gold exploration property spanning over 52,000 hectares. The project is at an early exploration stage, with recent work focused on UAV magnetic surveys, 3D modeling, and structural analysis to define drill targets. The company sold its non-core Big Kidd property in August 2024 for US$575,000.