VANCOUVER, BC, March 4,
2025 /CNW/ - 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
Brazil with an option to
rejuvenate the high-grade Serra Pelada gold-PGM project. I am
particularly excited to be returning to Serra Pelada again, having
significant experience with this deposit, 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.
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 Existing 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 Scholes 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 Helius Shares, 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
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.
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 update any forward-looking statement, whether as a
result of new information, future events or results or
otherwise.
SOURCE Helius Minerals Limited
