Search Minerals Inc. has completed a shares-for-debt transaction to settle $404,053.73 of outstanding debt with LeadFX Inc. The company issued 808,107 common shares at a deemed price of $0.50 per share to eliminate this financial obligation. This strategic decision replaces a previously planned unsecured convertible loan arrangement. The transaction serves to preserve cash resources and strengthen the company's balance sheet according to Search Minerals.
The issued shares will be subject to a standard four-month-and-one-day statutory hold period. Since LeadFX qualifies as a related party, the transaction falls under Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions regulations. Search Minerals indicated the transaction qualifies for exemptions from formal valuation and minority approval requirements under MI 61-101. The company stated the fair market value of the shares issued does not exceed 25% of its market capitalization, and no new control person will be created through this arrangement.
The company's focus remains on exploring for and developing Critical Rare Earth Elements (CREE) 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 established deposits named Foxtrot and Deep Fox, along with two drill-ready prospects called Fox Meadow and Silver Fox. The company also manages numerous other CREE prospects including Fox Valley, Foxy Lady and Awesome Fox along a 64-kilometer long belt that forms a CREE District in Labrador.
Additional CREE assets in the Red Wine CREE District of central Labrador include the drill-ready Two Tom Lake CREE-Be-Nb deposit, the Mann #1 CREE-Nb-Be prospect and Merlot CREE Prospect. The latest news and updates relating to the company are available in their newsroom at https://ibn.fm/SHCMF. The transaction represents a strategic financial management decision for Search Minerals as it continues developing its rare earth element projects.
By settling debt through share issuance rather than taking on additional loan obligations, the company maintains greater financial flexibility while advancing its exploration and development activities in Labrador's emerging rare earth districts. This approach allows the company to allocate more resources toward advancing its portfolio of critical mineral assets in a region gaining recognition for its rare earth element potential. The shares-for-debt arrangement demonstrates how junior mining companies can manage financial obligations while preserving capital for exploration activities that are essential for project advancement.
