Denarius Metals Announces Closing of First Tranche of Convertible Debentures Offering

Toronto, Ontario–(Newsfile Corp. – October 19, 2023) – Denarius Metals Corp. (TSXV: DSLV) (OTCQX: DNRSF) (“Denarius Metals” or the “Company”) announced today the closing of the first tranche of its private placement (the “Offering”) of Senior Unsecured Convertible Debentures (the “Debentures”) for gross proceeds of CA$6,494,000 (the “Offering”). As announced in the Company’s press release dated September 13, 2023, Denarius Metals plans to issue up to a total of CA$25,000,000 of Debentures and expects to complete the Offering in one or more additional tranches prior to October 31, 2023.

Serafino Iacono, Executive Chairman and CEO of Denarius Metals, commented, “The phase 1 construction activities to prepare our Zancudo Project to commence mining operations in 2024 are progressing on schedule. We have a solid order book comprised of management, institutional and retail investors for our Offering that will be completed in its entirety this month. Closing this first tranche of Debentures, predominantly management and retail investors, allows us to get moving with deposits on the longer lead time items, including the processing plant, to meet our critical path to start concentrate production in the fourth quarter of 2024.”

In conjunction with completing the first tranche of the Offering, the Company has updated the key terms of the Debentures, as previously disclosed in its press release dated September 13, 2023, in response to market conditions. The final key terms of the Debentures include:

1. The Debentures are issuable at a price of CA$1.00 per Debenture (the “Principal Amount”).
2. The Debentures are non-callable and mature and become payable in full on October 19, 2028 (“Maturity”), unless otherwise converted, prepaid or accelerated in accordance with their terms.
3. The Debentures bear interest at 12% per annum, paid monthly in equal installments in cash. The first interest payment will be made on November 30, 2023 and will include accrued interest from the date of issuance of the Debentures.
4. The Company will pay interest only during the first year of the term of the Debentures while the Zancudo Project construction is being completed. A portion of the gross proceeds has been set aside in escrow to fund the monthly interest payments during the first 12 months.
5. Commencing in the second year of the term of the Debentures, the Company will pay a Gold Premium on the Principal Amount of the Debentures in cash. The Gold Premium will be paid at the end of each quarter starting January 31, 2025. The Gold Premium will be calculated as a percentage equal to 25% of (i) the amount, if any, by which the London P.M. Fix on the quarterly measurement date exceeds US$1,800 (the “Floor Price”) divided by (ii) the Floor Price.
6. At any time prior to Maturity, the Debentures will be convertible at a holder’s option into common shares of the Company at a conversion price of CA$0.45 per share.
7. The Debentures represent senior unsecured obligations of the Company, ranking pari passu in right of payment with all other current and future unsecured debt of the Company and subordinated in right of payment, to all current and future secured debt and other liabilities of the Company, and senior in right of payment to any future debt and other liabilities of the Company that are expressly subordinated to the Debentures.
8. The Company intends to use the net proceeds of the Offering, after the interest escrow, to fund the construction activities at its Zancudo Project in Colombia and for working capital and general corporate purposes.
9. The Debentures are subject to a statutory hold period of four months plus one day after the date of issuance.

In connection with the Offering, insiders of the Company, including Mr. Serafino Iacono (Executive Chairman and Chief Executive Officer), Mr. Michael Davies (Chief Financial Officer), Ms. Amanda Fullerton (General Counsel and Secretary) and Mr. Federico Restrepo-Solano (Director), acquired a total of CA$2,944,000 of Debentures. In conjunction with the Offering, the Company paid a total of CA$41,250 of fees in cash to certain arm’s length agents and brokers who acted as finders.

The Company has received conditional approval to list the Debentures on Cboe Canada after the expiry of the four-month hold period. Listing of the Debentures on Cboe Canada is subject to final approval by Cboe Canada at the time of listing and the Company fulfilling listing requirements.

No U.S. Offering or Registration

This news release does not constitute an offer to sell, or the solicitation of an offer to buy securities in any jurisdiction, including the United States, other than the provinces and territories of Canada. The securities being offered pursuant to the Offering have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the “US Securities Act”), or the securities laws of any state of the United States. Such securities may not be offered or sold in the United States or to, or for the account or benefit of, any U.S. Person (as defined in Regulation S of the US Securities Act) or person in the United States except in a transaction exempt from or not subject to the registration requirements of the US Securities Act and applicable state securities laws.

About Denarius Metals

Denarius Metals is a Canadian junior company engaged in the acquisition, exploration, development and eventual operation of polymetallic mining projects in high-grade districts, with its principal focus on the Lomero Project in Spain. The Company signed a definitive option agreement with Europa Metals Ltd. in November 2022 pursuant to which Europa has granted Denarius Metals two options to acquire up to an 80% ownership interest in the Toral Zn-Pb-Ag Project, Leon Province, Northern Spain. The Company’s 100%-owned Zancudo Project in Colombia provides an opportunity to develop near-term production and cash flow through local contract miners and long-term growth through exploration.

Additional information on Denarius can be found on its website at www.denariusmetals.com and by reviewing its profile on SEDAR at www.sedarplus.ca.

Cautionary Statement on Forward-Looking Information

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

This news release contains “forward-looking information”, which may include, but is not limited to, statements with respect to the Offering, regulatory and TSX Venture Exchange final approval, listing of the Debentures on Cboe Canada, the use of proceeds of the Offering, the Company’s strategic plans and timing and expectation of commencement of mining operations. Often, but not always, forward-looking statements can be identified by the use of words such as “plans”, “expects”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates”, or “believes” or variations (including negative variations) of such words and phrases, or state that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Denarius to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Factors that could cause actual results to differ materially from those anticipated in these forward-looking statements are described under the caption “Risk Factors” in the Company’s Annual Information Form dated April 21, 2023 which is available for view on SEDAR at www.sedarplus.ca. Forward-looking statements contained herein are made as of the date of this press release and Denarius disclaims, other than as required by law, any obligation to update any forward-looking statements whether as a result of new information, results, future events, circumstances, or if management’s estimates or opinions should change, or otherwise. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, the reader is cautioned not to place undue reliance on forward-looking statements.

For Further Information, Contact:

Michael Davies
Chief Financial Officer
(416) 360-4653
investors@denariusmetals.com

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