Excelsior Mining Announces Closing of US$5,500,000 Financing

Rhea-AI Summary

Excelsior Mining Corp. (TSX: MIN) (FSE: 3XS) (OTCQB: EXMGF) closed a $5.5 million financing with Greenstone Excelsior Holdings LP and Triple Flag USA Royalties Ltd. The financing is a condition subsequent to the extension of the maturity date of its existing $15 million credit facility with Nebari Natural Resources Credit Fund I LP. The company issued a total of 27,180,000 Common Shares at a price of $0.11405 per Common Share for aggregate gross proceeds of $3.1 million. The terms of the Debentures are set out in the Company's press release dated November 30, 2023. Greenstone's participation in the Share Offering and Debenture Offering constitutes a 'related party transaction' as Greenstone is a related party of the Company. The Company is relying on an exemption from the formal valuation and minority shareholder approval requirements of MI 61-101.

Positive

• None.

Negative

• Greenstone's acquisition of an additional 57,383,369 Common Shares, representing approximately 20.7% of the Company's current issued and outstanding Common Shares, raises concerns about potential dilution for existing shareholders. The related party transaction with Greenstone may raise questions about the independence and fairness of the financing terms.

Phoenix, Arizona--(Newsfile Corp. - December 14, 2023) - Excelsior Mining Corp. (TSX: MIN) (FSE: 3XS) (OTCQB: EXMGF) ("Excelsior" or the "Company") is pleased to announce that it and its wholly-owned subsidiary Excelsior Mining Arizona, Inc. ("Excelsior Arizona") have closed a $5.5 million financing (the "Financing") with Greenstone Excelsior Holdings LP ("Greenstone") and Triple Flag USA Royalties Ltd. ("Triple Flag"). The closing of the Financing was a condition subsequent to the previously announced extension of the maturity date of its existing $15 million credit facility with Nebari Natural Resources Credit Fund I LP ("Nebari") to June 30, 2026. All dollar amounts in this press release are in United States dollars.

Dr. Stephen Twyerould, President & CEO of Excelsior, commented: "Closing this transaction with such strong support from our key stakeholders demonstrates we are on the right path. We look forward to 2024 with several transformational opportunities ahead of us, and our aim, with the support of our partners, is to actualize those opportunities."

Financing

On December 14, 2023, the Company closed a transaction with Triple Flag and Greenstone on the following terms: (i) Greenstone has sold 1.5% of its total 3% gross revenue royalty on the Johnson Camp Mine to Triple Flag for consideration of $5.5 million in cash (the "Royalty Sale"); and (ii) Greenstone has concurrently completed a $5.5 million financing with the Company that consists of $3.1 million in Common Shares (the "Share Offering") and $2.4 million principal amount of convertible debentures (the "Debenture Offering").

Pursuant to the Share Offering, the Company issued Greenstone a total of 27,180,000 Common Shares at a price of $0.11405 (C$0.155) per Common Share for aggregate gross proceeds of $3.1 million (C$4,212,900).

Pursuant to the Debenture Offering, Greenstone was issued $2.4 million (approximately C$3,254,640, based on an exchange rate of US$1:C$1.3561 on December 13, 2023) principal amount of convertible debentures (the "Debentures") by the Company. The terms of the Debentures are set out in the Company's press release dated November 30, 2023.

The Company intends to use the proceeds of the Share Offering and Debenture Offering for project development expenses and working capital.

Additional Information

Nebari and Triple Flag are at arm's length to the Company. There are no commissions or finders' fees payable in connection with the transactions discussed in this news release.

Greenstone and its affiliated entities previously held 116,028,937 Common Shares (representing 41.86% of the Company's current issued and outstanding Common Shares). Greenstone also owns and controls 1,250,000 options to acquire Common Shares and a convertible debenture with principal amount of $1.5 million that is convertible into 7,894,736 Common Shares. As a result of the closing of the Share Offering and Debenture Offering and conversion of the Debentures held by Greenstone (assuming conversion of all interest payments on the maturity date, using a conversion price of US$0.11405 and a SOFR rate of 5.3307%), Greenstone would acquire ownership and control over an additional 57,383,369 Common Shares, representing approximately 20.7% of the Company's current issued and outstanding Common Shares. As a result, together with the Common Shares it currently owns and controls, Greenstone would hold a total of 173,412,306 Common Shares, which will represent, in aggregate approximately 51.83% of the issued and outstanding Common Shares (assuming conversion of only the Debentures held by Greenstone and assuming the conversion of all interest to maturity at US$0.11405). Greenstone acquired the Debentures and the Common Shares for investment purposes. Depending on market conditions and other factors, Greenstone may from time to time acquire and/or dispose of securities of Excelsior or continue to hold its current position. A copy of the early warning report required to be filed with the applicable securities commission in connection with the acquisition of the Debentures and Common Shares will be available on SEDAR+ at www.sedarplus.com and can be obtained by contacting Gavin Hayman at +44 1481749700. Greenstone's address is set out below:

Greenstone contact information:

Greenstone Excelsior Holdings LP
PO Box 656, East Wing, Trafalgar Court,
Les Banques, St. Peter Port, Guernsey
GY1 3PP
Channel Islands

Pursuant to Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101"), Greenstone's participation in the Share Offering and Debenture Offering constitutes a "related party transaction" as Greenstone is a related party of the Company. The Company is relying on an exemption from the formal valuation and minority shareholder approval requirements of MI 61-101 pursuant to exemptions contained in sections 5.5(a) and 5.7(1)(a) of MI 61-101 on the basis that at the time Greenstone's participation in the Share Offering and Debenture Offering was agreed to, neither the fair market value of the securities to be distributed in the Share Offering and Debenture Offering nor the consideration to be received for those securities, insofar as the Share Offering and Debenture Offering involved the related party, exceeds 25% of the Company's market capitalization. The Company did not file a material change report related to this financing more than 21 days before the closing of the Debenture Offering as required by MI 61-101 since the details of the participation by the related parties of the Company were not settled until just prior to closing and the Company wished to close on an expedited basis for sound business reasons. The Common Shares that will be acquired by Greenstone were acquired pursuant to an exemption from the prospectus requirement in section 2.3 of National Instrument 45-106.

In order to facilitate the completion of the Royalty Sale, Share Offering and Debenture Offering, the Company first acquired the 1.5% gross revenue royalty on the Johnson Camp Mine from Greenstone in return for the Common Shares and Debenture and then transferred the royalty to Triple Flag for $5.5 million in cash. In addition, the holders of the $3 million principal amount of convertible debentures issued by the Company in February 2023 have agreed to extend the maturity date of such convertible debentures to September 30, 2026.

The Company also announces that, in connection with the Third Amendment to the Amended and Restated Credit Agreement with Nebari, it has issued 9,208,093 Common Shares to nominees of Nebari.

ABOUT EXCELSIOR MINING

Excelsior "The Copper Solution Company" is a mineral exploration and production company that owns and operates the Gunnison Copper Project in Cochise County, Arizona. The project is a low cost, environmentally friendly in-situ recovery copper extraction project that is permitted to 125 million pounds per year of copper cathode production. Excelsior also owns the past producing Johnson Camp Mine and a portfolio of exploration projects, including the Peabody Sill and the Strong and Harris deposits.

Excelsior has entered into an agreement with Nuton LLC, a Rio Tinto venture, to further evaluate the use of its Nuton™ copper heap leaching technologies at Excelsior's Johnson Camp mine in Cochise County, Arizona. Under the agreement, Excelsior remains the operator and Nuton funds Excelsior's costs associated with a two-stage work program at Johnson Camp. Nuton has provided a US$3 million pre-payment to Excelsior for Stage 1 costs and a payment of US$2 million for an exclusive option to form a joint venture with Excelsior over the Johnson Camp Mine after the completion of Stage 2. If Nuton proceeds to Stage 2, it will make a US$5 million payment to Excelsior for the use of existing infrastructure at the Johnson Camp mine for the Stage 2 work program. Nuton will also be responsible for funding all of Excelsior's costs associated with Stage 2.

For more information on Excelsior, please visit our website at www.excelsiormining.com.

For further information regarding this press release, please contact:

Excelsior Mining Corp.
Concord Place, Suite 300, 2999 North 44^th Street, Phoenix, AZ, 85018.

Shawn Westcott
T: 604.365.6681
E: info@excelsiormining.com
www.excelsiormining.com

Cautionary Note Regarding Forward-Looking Information

This news release contains "forward-looking information" concerning anticipated developments and events that may occur in the future. Forward looking information contained in this news release includes, but is not limited to, statements with respect to: (i) the completion of the conditions to the Third Amended ARCA; (ii) the use of proceeds of the Share Offering and Debenture Offering; (iii) the details of the transaction with Nuton LLC and (iv) future production and production capacity from the Company's mineral projects.

In certain cases, forward-looking information can be identified by the use of words such as "plans", "expects" or "does not expect", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might", "occur" or "be achieved" suggesting future outcomes, or other expectations, beliefs, plans, objectives, assumptions, intentions or statements about future events or performance. Forward-looking information contained in this news release is based on certain factors and assumptions regarding, among other things, the availability of financing to implement the Company's operational plans, the estimation of mineral resources and mineral reserves, the realization of resource and reserve estimates, expectations and anticipated impact of the COVID-19 outbreak, copper and other metal prices, the timing and amount of future development expenditures, the estimation of initial and sustaining capital requirements, the estimation of labour and operating costs (including the price of acid), the availability of labour, material and acid supply, receipt of and compliance with necessary regulatory approvals and permits, the estimation of insurance coverage, and assumptions with respect to currency fluctuations, environmental risks, title disputes or claims, and other similar matters. While the Company considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect.

Forward looking information involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information. Such factors include risks inherent in the construction and operation of mineral deposits, including risks relating to changes in project parameters as plans continue to be redefined including the possibility that mining operations may not be sustained at the Gunnison Copper Project, risks relating to variations in mineral resources and reserves, grade or recovery rates, risks relating to the ability to access infrastructure, risks relating to changes in copper and other commodity prices and the worldwide demand for and supply of copper and related products, risks related to increased competition in the market for copper and related products, risks related to current global financial conditions, risks related to current global financial conditions and the impact of COVID-19 on the Company's business, uncertainties inherent in the estimation of mineral resources, access and supply risks, risks related to the ability to access acid supply on commercially reasonable terms, reliance on key personnel, operational risks inherent in the conduct of mining activities, including the risk of accidents, labour disputes, increases in capital and operating costs and the risk of delays or increased costs that might be encountered during the construction or mining process, regulatory risks including the risk that permits may not be obtained in a timely fashion or at all, financing, capitalization and liquidity risks, risks related to disputes concerning property titles and interests, environmental risks and the additional risks identified in the "Risk Factors" section of the Company's reports and filings with applicable Canadian securities regulators.

Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. Accordingly, readers should not place undue reliance on forward-looking information. The forward-looking information is made as of the date of this news release. Except as required by applicable securities laws, the Company does not undertake any obligation to publicly update or revise any forward-looking information.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/191089

FAQ

What was the total value of the financing closed by Excelsior Mining Corp. (TSX: MIN) (FSE: 3XS) (OTCQB: EXMGF)?

The company closed a $5.5 million financing with Greenstone Excelsior Holdings LP and Triple Flag USA Royalties Ltd.

What was the condition for the closing of the financing?

The closing of the Financing was a condition subsequent to the extension of the maturity date of its existing $15 million credit facility with Nebari Natural Resources Credit Fund I LP.

How many Common Shares were issued by Excelsior Mining Corp. in the Share Offering?

The company issued a total of 27,180,000 Common Shares at a price of $0.11405 per Common Share for aggregate gross proceeds of $3.1 million.

What is the significance of Greenstone's participation in the Share Offering and Debenture Offering?

Greenstone's participation constitutes a 'related party transaction' and the Company is relying on an exemption from the formal valuation and minority shareholder approval requirements of MI 61-101.