Search Minerals Announces Secured Loan Terms
Search Minerals Announces Secured Loan Terms
VANCOUVER, British Columbia, March 06, 2023 -- Search Minerals Inc. (“Search” or the “Company”) (TSXV: SMY), is
pleased to announce that that it has entered into a term sheet with InCoR Holdings Limited (“InCor” or the “Lender”) dated
March 6, 2023, pursuant to which InCor will provide a secured term loan (the “Loan”) to the Company in the principal amount
of $2.5 million (the “Principal ”).
The Loan will have a 2-year term and will bear interest at a rate of 22.5% per annum, compounded annually. The Loan will be
secured by a general security agreement between the parties. The Company may pay back the Principal plus accrued and
unpaid interest on the Loan to the Lender at anytime after the one-year anniversary of the Loan.
Subject to approval of the TSX Venture Exchange (the “ TSXV”), the Company will also issue to the Lender such number of
bonus common shares in the capital of the Company (the “ Bonus Shares”) equal to $500,000, being 20% of the Principal,
with pricing of the Bonus Shares to be based on the market price of the Company’s common shares following TSXV approval.
No commission or finder’s fee were paid in connection with the Loan. All bonus securities are subject to a hold period of four
months and one day from the date of issuance.
The Company intends to use the majority of the proceeds of the Loan for part of the construction costs of a demonstration
plant for rare earth extraction and recovery in connection with the Company’s Deep Fox and Foxtrot projects and the remaining
portion for working capital requirements.
Multilateral Instrument 61-101
The Loan and the issuance of the Bonus Shares is a "related party transaction" under Multilateral Instrument 61-101-
Protection of Minority Security Holders in Special Transactions ("MI 61-101") as InCor is an insider of the Company, currently
owning 95,678,905 common shares of the Company, representing approximately 23% of the issued and outstanding shares of
the Company. The Company has relied on the exemptions from the valuation and minority shareholder approval requirements
of MI 61-101 contained in sections 5.5(a) and 5.7(1)(a) of MI 61-101 on the basis that the transactions did not exceed 25% of
the fair market value of the Company’s market capitalization. Each of David Dreisinger, George Molyviatis and Jocelyn
Bennett, as non-independent directors of the Company, abstained from voting on the resolutions of the board of directors of the
Company approving the Loan and issuance of the Bonus Shares. The Company did not file a material change report more than
21 days before the expected closing of the Loan as the terms of the Loan were not settled until shortly prior to closing and the
Company and the parties wished to close the Loan on an expedited basis for sound business reasons.
About Search Minerals Inc.
Led by a proven management team and board of directors, Search is focused on finding and developing Critical Rare Earths
Elements (CREE), Zirconium (Zr) and Hafnium (Hf) resources within the emerging Port Hope Simpson – St. Lewis CREE
District of South East Labrador. Search controls two deposits (Foxtrot and Deep Fox), two drill ready prospects (Fox Meadow
and Silver Fox) and numerous other REE prospects, including Fox Valley, Foxy Lady and Awesome Fox, along a 64 km long
belt forming a REE District in Labrador. Search has completed a preliminary economic assessment report for DEEPFOX and
FOXTROT. Search is also working on three exploration prospects along the belt which include: FOX MEADOW, SILVER FOX
and AWESOME FOX. Search has continued to optimize our patented Hydrometallurgy Direct Extraction Process technology
with the support from the Department of Industry, Energy and Technology, Government of Newfoundland and Labrador, and
from the Atlantic Canada Opportunity Agency. We have completed two pilot plant operations and produced highly purified
mixed rare earth carbonate concentrate and mixed REO concentrate for separation and refining. We also recognize the
continued support by the Government of Newfoundland and Labrador for its Junior Exploration Program. Search Minerals was
selected to participate in the Government of Canada Accelerated Growth Service (“AGS”) initiative, which supports high growth
companies. AGS, as a ‘one-stop shop’ model, provides Search with coordinated access to Government of Canada resources
as Search continues to move quickly to production and contribute to the establishment of a stable and secure rare earth
element North American and European supply chain.
All material information on the Company may be found on its website at www.searchminerals.ca and on SEDAR at
www.sedar.com
For further information, please contact:
Leo Power
Chairman of the Board
Tel: 709-682-3543
E-mail: [email protected]
Dr. David Dreisinger
Director and Vice President of Metallurgy
Tel: 604-613-4434
Email: [email protected]
This news release shall not constitute an offer to sell or solicitation of an offer to buy the securities of the Company. There
shall be no offer or sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to
the registration or qualification of such securities under the laws of any such jurisdiction.
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.
Not for distribution to U.S. Newswire Services or for dissemination in the United States. Any failure to comply with this
restriction may constitute a violation of U.S. securities laws.
Cautionary Statement Regarding “Forward-Looking” Information.
This news release includes certain “forward-looking information” and “forward-looking statements” (collectively “forward-looking
statements”) within the meaning of applicable Canadian and United States securities legislation including the United States
Private Securities Litigation Reform Act of 1995.
Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by words
such as the following: expects, plans, anticipates, believes, intends, estimates, projects, assumes, potential and similar
expressions. Forward-looking statements also include reference to events or conditions that will, would, may, could or should
occur, including, without limitation, statements regarding the Company’s anticipated use of proceeds of the Loan and the
timing for the issuance of the Bonus Shares. In making the forward-looking statements in this news release, the Company
has applied certain factors and assumptions that the Company believes are reasonable, including that the Company will use
the proceeds of the Loan as anticipated by management, and that the timing and issuance of the Bonus Shares will be
intended by the Company. However, the forward-looking statements in this news release are subject to numerous risks,
uncertainties and other factors that may cause future results to differ materially from those expressed or implied in such
forward-looking statements, including without limitation: any delay in obtaining TSXV approval for the issuance of the Bonus
Shares, and that the Company may not use the proceeds of the Loan as intended. There can be no assurance that such
statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such
statements. Accordingly, readers should not place undue reliance on forward-looking statements and forward-looking
information. Readers are cautioned that reliance on such information may not be appropriate for other purposes. The Company
does not undertake to update any forward-looking statement, forward-looking information or financial out-look that are
incorporated by reference herein, except in accordance with applicable securities laws.