Helius Minerals Enters Agreement for the Serra Pelada High- Grade Gold-PGM Project, Brazil
Helius Minerals Enters Agreement for the Serra Pelada High-
Grade Gold-PGM Project, Brazil
Vancouver B.C., March 4, 2025 - Helius Minerals Limited (“Helius” or the “Company”) (TSXV:
HHH) is pleased to announce that it has signed a definitive Exclusivity, Share Option and
Acquisition Agreement dated as of March 3 , 2025 (the “Definitive Agreement”) with Colossus
Minerals Inc. (“ Colossus”) regarding the Serra Pelada gold-PGM project in Brazil (the “ Serra
Pelada Project”). Colossus put Serra Pelada on a care and maintenance program in 2014 when
Colossus became insolvent. The property interests are held by Colossus’ Brazilian subsidiaries,
Colossus Mineração Ltda. (“Colossus Brazil”) and Mineração Fazenda Monte Belo Ltda. (“MFM”
collectively with Colossus Brazil, the “Target Companies”).
Under the Definitive Agreement, Helius has been provided with a twelve-month exclusivity period
(the “Organizational Period”) during which it would raise not less than US$1 million (to be priced
in the context of the market following this announcement) (the “Initial Financing”) and allocate a
minimum of US$500,000 to undertake the following activities:
- Reviewing and developing a plan to ensure compliance with relevant mining laws and
other regulatory requirements;
- Formulating a comprehensive strategy to address outstanding debts, including those
related to ongoing litigation, of the Target Companies; and
- Developing a detailed plan to rehabilitate the Serra Pelada Project, the Target Companies
and SPCDM (as defined below; collectively, the “Organizational Period Requirements”).
Christian J. Grainger, President and CEO commented: “We are excited to have restructured
Helius with exceptional gold and copper assets in Nevada, USA , located within the
prospective Walker Lane trend , and now Braz il with an option to rejuvenate the high-grade
Serra Pelada gold -PGM projec t. I am particularly excited to be returning to Serra Pelada
again, having significant experience with this dep osit, and to be working with our partners
COOMIGASP ”.
In 2014, Colossus became insolvent after significant development expenditure of over C$280M
at Serra Pelada. Colossus’ dewatering measures proved inadequate in controlling water ingress.
This created liquidity and credibility issues immediately before metal production was to
commence, which led to the collapse of Colossus.
The Serra Pelada Project was thereafter put on a care and maintenance program, and Colossus
reported that it halted all exploration, construction and development activities to conserve cash in
2014. Helius understands that as a result of the insolvency , certain regulatory and compliance
matters must be addressed to permit the project to move forward.
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The Option
Upon Helius’ satisfaction of the Organizational Period Requirements, and upon receipt of
conditional approval from the TSX Venture Exchange (the “TSXV”), Helius could elect in its sole
discretion to deliver written notice to Colossus (the “Option Notice”) of Helius’ decision to proceed
with an option (the “Option”) to purchase (a) all of the Target Companies’ Shares and thereby a
75% beneficial interest in the partnership called Serra Pelada - Companhia de Desenvolvimento
Mineral (“SPCDM”), which partnership holds a 100% interest in the Serra Pelada Project; and (b)
all of the intercorporate loans (and all interest accrued thereunder) owed by the Target Companies
to Colossus, if any (the “Intercompany Debt”).
Helius could elect to exercise the Option within 6 months of the date of delivery of the Option
Notice, in which case the parties would proceed with closing of Helius’ purchase of the Target
Companies’ Shares and any Intercompany Debt. At closing, Helius would be obliged to, among
other things: (a) provide evidence to Colossus of Helius having raised at least US$5 million by
way of one or more equity financings (the “Equity Financing”); (b) pay the sum of US$100,000
to Colossus; (c) effect the exchange of the existing senior secured convertible notes issued by
Colossus (the “Existing Notes”) in an aggregate principal amount of US$4 million (the “Existing
Debt”) for amended senior secured convertible notes (“Amended Notes”) that Helius would issue
to the holders of the E xisting Notes in exchange for the Existing Debt; (d) deliver the Parent
Guarantee (as such term is defined below); (e) pay to Colossus the sum of C$100,000 in cash as
directed by Colossus; (f) issue to Colossus C$250,000 in share purchase warrants with a 5-year
term and strike price equal to the price of the Equity Financing, with the number of warrants to be
determined using Black Schol es option pricing formula (the issuance of such warrants being
subject to TSXV approval); (g) issue full and final releases to Colossus and other parties in relation
to the Existing Notes and the debts, liabilities and obligations of the Target Companies; and (h)
enter into assumption agreements in respect of security provided by Colossus in respect of the
Existing Notes and the Existing Royalty (as such term is defined below).
The Special Warrants
Concurrent with Helius’s delivery of an option notice, and as partial consideration for the Option,
Helius will issue to Colossus such number of special warrants (the “ Special Warrants”) that
represents 10% of the issued and outstanding common shares of Helius (“Helius Shares”) after
completion of the Initial Financing (on an undiluted basis). The issuance of the Special Warrants
is subject to TSXV approval. After Closing, the Special Warrants will be convertible into Helius
Shares on a one-for-one basis and for no additional consideration on the second anniversary of
the date of Closing, subject to the Special Warrants becoming convertible earlier upon: (a) Helius
having prepared an updated resource estimate for the Serra Pelada Project in accordance with
National Instrument 43 -101; and (b) Helius having prepared an engineering options study on
mining methods for the Serra Pelada Project.
The Amended Notes
After Closing, the principal amount outstanding under the Amended Notes may be convertible at
the option of the holder and on a one time basis into Helius Shares at a price equal to the price
at which Helius securities are sold pursuant to the Equity Financing (the “Conversion Privilege”),
save and except that: (i) a holder would not be able to fully exercise the Conversion Privilege to
convert the principal amount outstanding into Helius Shares if such full conversion would result in
the holder beneficially owning in excess of 9.9% of the issued and outstanding He lius Shares,
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and (ii) the Conversion Privilege will be subject to accelerated termination should the closing
trading price of the Helius Shares on the TSXV exceed 200% of the price of the Equity Financing
for a period of 30 consecutive trading days.
Helius would become required to commence repaying the principal of the Amended Notes 12
months after the date of commencement of commercial production from the Serra Pelada Project
(the “Date of Commencement of Commercial Production”), and Helius would make 16 equal
and quarterly payments thereafter . Any existing accrued interest outstanding pursuant to the
Existing Notes would be extinguished or settled by Colossus, at Colossus’s cost, prior to Closing.
Interest will accrue and be charged at a rate of 10% per annum from the Date of Commencement
of Commercial Production. Helius could elect to settle up to 50% of individual interest payments
in Helius Shares. If Helius raised aggregate proceeds through a single, or series, of debt and/or
equity financings in excess of US$7.5 million (the difference being the “ Excess Amount”), 25%
of such Excess Amount shall be credited towards prepayment of the Amended Notes.
The Existing Royalty
The Serra Pelada Project is subject to a 2% net smelter returns royalty (the “Existing Royalty”)
in favour of a third party. In connection with closing of the acquisition of the Target Companies’
Shares, Helius would agree, as parent, to guarantee (the “Parent Guarantee”) the obligations of
Colossus Brazil pursuant to the royalty agreement between the royaltyholder and Colossus Brazil
in respect of the Existing Royalty. Should certain adjacent land be acquired by Helius, or its
affiliates, it shall be subject to the Existing Royalty.
The transaction is subject to receipt of TSXV approval, and to Colossus’ receipt on or before May
5, 2025 of (i) shareholder approval by way of a special resolution to the disposition of the Serra
Pelada Project to Helius ; and (ii) approval from the holders of the Existing Notes to the
amendment of the terms of the Existing Notes as to be reflected in the Amended Notes.
About Helius Minerals Limited
Helius is a mineral exploration company focused on the identification and exploration of high -
quality mineral assets across the Americas, with an emphasis on South American jurisdictions.
On Behalf of the Board of Directors of
Helius Minerals Limited
Christian Grainger (PhD, AIG)
President and CEO
M: +57 3146364676
Website: www.heliusminerals.com
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term in defined in the policies
of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release.
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CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS: This news release may contain forward-looking information
within the meaning of applicable securities laws (“forward-looking statements”). Forward-looking statements are statements
that are not historical facts and are generally, but not always, identified by the words “expects,” “plans,” “anticipates,” “believes,”
“intends,” “estimates,” ‘projects,” “potential” and similar expressions, or that events or conditions “will,” “would,” “may,”
“could” or “should” occur. These forward-looking statements are subject to a variety of risks and uncertainties which could cause
actual events or results to differ materially from those reflected in the forward-looking statements, including, without limitation:
the uncertainties inherent to current and future legal challenges that face the Serra Pelada Project and the Target Companies ;
controls, regulations, and political or economic developments in Brazil; changes in national and local government legislation in
Canada and Brazil; the lack of certainty with respect to foreign legal systems, which may not be immune from the influence of
political pressure, corruption or other factors that are inconsistent with the rule of law; the speculative nature of mineral
exploration and development, including the risks of obtaining and maintaining the validity and enforceability of the necessary
licenses and permits and complying with the permitting requirements of Brazil; fluctuations in the international currency markets
and in the rates of exchange of the currencies of Canada, the United States and Brazil; significant capital requirements; risks
related to fluctuations in metal prices; uncertainties related to raising sufficient financing to fund exploration work in a timely
manner and on acceptable terms; changes in planned work resulting from weather, logistical, technical or other factors ; the
possibility that results of work will not fulfill expectations and realize the perceived potential of the Serra Pelada Project; risk of
accidents, equipment breakdowns and labour disputes or other unanticipated difficulties or interruptions; the possibility of cost
overruns or unanticipated expenses in conducting work programs; the risk of environmental contamination or damage resulting
from Helius’ operations and other risks and uncertainties. Any forward -looking statement speaks only as of the date it is made
and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to up date any
forward-looking statement, whether as a result of new information, future events or results or otherwise.