Galleon Gold Completes $46 Million Senior Secured Debt Financing with Pan American Silver Corp.
Galleon Gold Completes $46 Million Senior
Secured Debt Financing with Pan American
Silver Corp.
Toronto, Ontario--(Newsfile Corp. - December 30, 2025) - Galleon Gold Corp. (TSXV: GGO) (FSE:
3H90) ("
Galleon Gold
" or the "
Company
") is pleased to announce that further to its press release
dated November 24, 2025, it has entered into a credit facility of up to
$46 million
(the "
Facility
") with
Pan American Silver Corp. ("
Pan American
").
Facility Details
24-month maturity from closing with principal repayable at maturity, subject to a prepayment
provision after one year.
Bears interest at a floating rate equal to the 12-month prime reference rate plus 7.00%, payable
monthly in arrears ("
Interest Payment
").
The Facility is secured by first-ranking security over substantially all of the Company's assets,
including the West Cache Gold Project (the "
Project
" or "
West Cache
"), subject to customary
permitted encumbrances.
An arrangement fee equal to 2.5% (the "
Arrangement Fee
") of the Facility.
Standby fee (the "
Standby Fee
") on the daily unadvanced portion of the Facility at a rate of 1.6%
per annum. The Standby Fee is payable in arrears on each Interest Payment date.
Arrangement Fee, Interest Payments and Standby Fee are payable in cash or, at Pan American's
option, in common shares of the Company ("
Common Shares
"), subject to applicable regulatory
requirements and stock exchange approval.
"This financing represents a major milestone for Galleon Gold and along with the recent $30 million
equity raised provides the capital required to completed the planned bulk sample at West Cache," said
Mr. David Russell, President and Chief Executive Officer of Galleon Gold.
"The support of Pan
American Silver underscores the strength of the project and positions the Company to execute its near-
term development objectives."
Funds drawn from the Facility will be used to advance underground development and infrastructure
required to complete the bulk sample program at the Company's West Cache Gold Project and for
working capital and general corporate purposes. An initial draw of $11 million will be used to fund the
repurchase of the existing 3% net smelter return royalty on the Project.
Pan American has elected to receive its Arrangement Fee of $1,150,000 in Common Shares. The
Company will issue a total of 1,074,766 Common Shares at a price of $1.07 per share in satisfaction of
the Arrangement Fee (the "
Arrangement Fee Shares
").
The issuance of the Arrangement Fee Shares
in satisfaction of the Arrangement Fee has been conditionally accepted by the TSX Venture Exchange
(the "
Exchange
"), subject to meeting customary conditions for final acceptance.
The Facility and the issuance of the Arrangement Fee Shares each constitute a "related party
transaction", for the Company within the meaning of TSX-V Policy 5.9 and Multilateral Instrument 61-101
-
Protection of Minority Security Holders in Special Transactions
("
MI 61-101
") as, at the time of
entering into the Facility, Pan American was a "related party" of the Company by reason of its ownership
of more than 10% of the issued and outstanding Common Shares. In connection with the Facility, the
Company has relied on the exemption from the formal valuation requirement of MI 61-101 contained in
section 5.5(b) as the Company's Common Shares are not listed in a specified market and minority
shareholder approval requirement of MI 61-101 contained in section 5.7(1)(f) of MI 61-101, as the
Facility is a commercial loan with no equity or voting component.
In connection with the issuance of the
Arrangement Shares, the Company has relied on the exemption from the formal valuation requirement of
MI 61-101 contained in section 5.5(b) as the Company's Common Shares are not listed in a specified
market and minority shareholder approval requirement of MI 61-101 contained in section 5.7(1)(a) of MI
61-101 as neither the fair market value (as determined under MI 61-101) of the subject matter of, nor the
fair market value of the consideration for, the transaction, insofar as it involved the interested party,
exceeded 25% of the Company's market capitalization (as determined under MI 61-101).
Prior to the issuance of the Arrangement Fee Shares, Pan American owned 18,750,000 Common
Shares, 9,375,000 Warrants and the Debenture or 14.41% of the issued and outstanding Common
Shares on a non-diluted basis and 29.19% on a partially-diluted basis, assuming exercise and
conversion the Warrants (as defined below) and the Debenture (as defined below), respectively, in full.
Following the issuance of the Arrangement Fee Shares, Pan American will own 19,824,766 Common
Shares, 9,375,000 Warrants and the Debenture or 15.11% of the issued and outstanding Common
Shares on a non-diluted basis and 29.67% on a partially-diluted basis, assuming exercise and
conversion the Warrants and Debenture, respectively, in full.
The ability of Pan American to exercise the
Warrants and convert the Debenture remains subject to certain restrictions discussed below.
Summary of Pan American Investments with Galleon Gold
On August 13, 2025, the Company issued to Pan American a $8 million convertible debenture
convertible (the "
Debenture
") into 17,777,777 Common Shares at a price of $0.45 per share.
Prior to
the issuance of the Debenture, Pan American did not own or have direction or control over any Common
Shares. Following the issuance of the Debenture and assuming conversion of the Debenture in full, Pan
American would have owned 17,777,777 Common Shares or approximately 19.59% of the issued and
outstanding Common Shares on a partially-diluted basis.
Under the terms of the investment agreement
(the "
Investment Agreement
") entered into between the Company and Pan American in connection
with the Debenture, Pan American agreed to be subject to a standstill for a period of 36 months
preventing Pan American from acquiring any additional securities of the Company that would result in
Pan American owning or having direction or control of over more that 19.9% of the issued and
outstanding Common Shares without the prior consent of the Company.
The Investment Agreement also
grants Pan American a right to participate on a
pro rata
basis in any future equity financings by the
Company until the earlier of November 20, 2025 and the date that Pan American owns less than 5% of
the issued and outstanding Common Shares calculated on a fully-diluted basis.
On November 22, 2025, the Company and Pan American made certain amendments to the Debenture
and the Investment Agreement. In particular, the Debenture was amended to include a restriction
providing that the Debenture could not be converted to the extent that after conversion Pan American
would own or have direction or control over more than 9.9% of the issued and outstanding Common
Shares. In addition, the amendment further provided that the Debenture could not be converted to the
extent that following conversion Pan American would own or have direction or control over more that
19.9% of the issued and outstanding Common Shares until such time as shareholders of the Company
have approved Pan American as a control person of the Company in accordance with the requirements
of the Exchange.
Under the terms of the amendment, the Company also agreed to seek shareholder
approval for Pan American as a control person of the Company at its next annual general meeting. The
Investment Agreement was amended to extend the expiry date of the pre-emptive rights granted to Pan
American to January 31, 2026.
The amendments were put in place as the Company and Pan American
were then in discussions regarding possible additional financing being provided by Pan American and
then amendments were intended to help facilitate those discussions.
On December 4, 2025, Pan American purchased 18,750,000 units of the Company at a price of $0.60
per unit for an aggregate purchase price of $11,250,000 with each unit being comprised of one
Common Shares and one-half common share purchase warrant (each whole warrant, a "
Warrant
").
The
investment by Pan American completed along with a larger brokered financing of 31,250,000 units for
gross proceeds of $18,750,000 (the "
December 2025 Financing
").
Prior to the completion of the
December 2025 Financing, Pan American did not own or have direction of any Common Shares and
owned the Debenture, which was convertible into to 17,777,777 Common Shares, subject to restriction
that Pan American cannot convert the Debenture to extent it would own more than 9.9% of the issued
and outstanding Common Shares following conversion.
Following the December 2025 Financing, Pan
American owned 18,750,000 Common Shares, 9,375,000 Warrants and the Debenture or 14.70% of
the issued and outstanding Common Shares on a non-diluted basis and 29.68% on a partially-diluted
basis, assuming exercise and conversion the Warrants and Debenture, respectively, in full.
The ability of
Pan American to exercise the Warrants and convert the Debenture remains subject to the restriction on
Pan American's ability to exercise the Warrants or covert the Debenture where Pan American's post-
exercise or conversion holding of Common Shares would be greater than 19.9% of the issued and
outstanding Common Shares unless shareholders of the Company have first approved Pan American as
a control person of the Company in accordance with the policies of the Exchange.
The ability of Pan
American to exercise the Warrants and convert the Debenture also remains subject to the standstill
provisions contained in the Investment Agreement.
About Galleon Gold
Galleon Gold is advancing the West Cache Gold Project with a disciplined, de-risking strategy centered
on resource growth and an upcoming 86,500-tonne bulk sample program, positioning the Company to
unlock long-term shareholder value. For more information, please visit
www.galleongold.com
.
For further information:
Galleon Gold
R. David Russell
Chairman and CEO
T. (416) 644-0066
Graham Farrell
Investor Relations
T. (416) 842-9003
Forward-looking statements
This news release contains certain "forward-looking statements", as defined under applicable Canadian
securities laws, that reflect the current views and/or expectations of Galleon Gold with respect to its long-
term strategy, financing plans, proposed work, plans, bulk sample program and other reports including
the PEA for its projects.
Forward-looking statements are based on the then-current expectations, beliefs,
assumptions, estimates and forecasts about the business and the markets in which Galleon Gold
operates.
Some of the statements contained herein may be forward-looking statements which involve
known and unknown risks and uncertainties.
Without limitation, statements regarding the use of the
proceeds of from the Facility, the sufficiency of funds to complete and the completion of the potential
mineralization and resources, exploration results, expectations, plans, and objectives of Galleon Gold
are forward-looking statements that involve various risks.
The following are important factors that could
cause Galleon Gold's actual results to differ materially from those expressed or implied by such forward-
looking statements: changes in the world-wide price of mineral commodities, general market conditions
and uncertainty of access to additional capital, risks inherent in mineral exploration, delays in the receipt
of government approvals, risks associated with development, construction, mining operations and third
party contractor activities,
risks related to unanticipated events related to health, safety and
environmental matters. There can be no assurance that forward-looking statements will prove to be
accurate as actual results and future events may differ materially from those anticipated in such
statements.
Galleon Gold undertakes no obligation to update such forward-looking statements if
circumstances or management's estimates or opinions should change.
The reader is cautioned not to
place undue reliance on such forward-looking statements.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in
policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this
release.
To view the source version of this press release, please visit
https://www.newsfilecorp.com/release/279176