Search Minerals Inc. (TSX.V: SMY) (OTC: SHCMF) has settled $404,053.73 of outstanding debt through a shares-for-debt transaction with LeadFX Inc., issuing 808,107 common shares at a deemed price of $0.50 per share. The company stated this approach, instead of proceeding with a previously planned unsecured convertible loan, will preserve cash and strengthen its balance sheet. The shares issued carry a four-month-and-one-day statutory hold period.
Because LeadFX is a related party, the transaction falls under MI 61-101 regulations. Search Minerals indicated the transaction qualifies for exemptions from formal valuation and minority approval requirements since the fair market value of shares issued does not exceed 25% of the company's market capitalization. The company confirmed no new control person will be created through this transaction.
This debt settlement is significant for Search Minerals as it allows the company to conserve financial resources while continuing to develop its critical rare earth elements (CREE) projects. The company focuses on exploring and developing Critical Rare Earth Elements as well as transition metals Zirconium and Hafnium within the emerging Port Hope Simpson – St. Lewis CREE District of South-East Labrador. Search Minerals controls two deposits (Foxtrot and Deep Fox), two drill-ready prospects (Fox Meadow and Silver Fox), and numerous other CREE prospects including Fox Valley, Foxy Lady and Awesome Fox along a 64-kilometre long belt forming a CREE District in Labrador.
The company also controls additional CREE assets in the Red Wine CREE District of central Labrador, including the drill-ready Two Tom Lake CREE-Be-Nb deposit, the Mann #1 CREE-Nb-Be prospect and Merlot CREE Prospect. Investors seeking more information about Search Minerals can find updates in the company's newsroom at https://ibn.fm/SHCMF.
This transaction matters because it demonstrates Search Minerals' strategic approach to financial management while advancing projects critical to the global supply chain for rare earth elements. These elements are essential components in numerous modern technologies including electric vehicles, renewable energy systems, and defense applications. By strengthening its balance sheet through this shares-for-debt arrangement rather than taking on additional debt, the company positions itself more favorably for continued exploration and development activities in Labrador's emerging CREE districts.
The preservation of cash through this transaction enables Search Minerals to allocate resources toward advancing its portfolio of rare earth element projects at a time when global demand for these critical materials continues to grow. The company's focus on the Port Hope Simpson – St. Lewis CREE District and Red Wine CREE District represents strategic positioning within North America's developing rare earth element supply chain, which has gained increased attention due to geopolitical considerations and supply chain vulnerabilities.
