Search Minerals Settles $404K Debt Through Shares-for-Debt Transaction to Preserve Cash

Search Minerals Inc. (TSX.V: SMY) (OTC: SHCMF) has entered into a shares-for-debt transaction with LeadFX Inc. to settle outstanding debt totaling $404,053.73 through the issuance of 808,107 common shares at a deemed price of $0.50 per share. The company stated that completing this transaction, rather than proceeding with a previously planned unsecured convertible loan, will preserve cash and strengthen its balance sheet. This strategic financial move allows Search Minerals to manage its liabilities without depleting cash reserves, which is particularly important for a company focused on exploring and developing critical rare earth elements and transition metals.

The shares issued in this transaction will carry a four-month-and-one-day statutory hold period, which is standard for such arrangements. Since LeadFX is considered a related party, the transaction falls under Multilateral Instrument 61-101, which governs protection of minority security holders in special transactions. However, Search Minerals indicated that the transaction qualifies for exemptions from the formal valuation and minority approval requirements because the fair market value of the shares issued does not exceed 25% of the company's market capitalization. This exemption streamlines the process and avoids additional regulatory hurdles that could delay the debt settlement.

The company emphasized that no new control person will be created as a result of this transaction, maintaining the current ownership structure and preventing any single entity from gaining disproportionate influence. This assurance is important for existing shareholders who might be concerned about potential dilution or shifts in corporate control. The transaction represents a calculated approach to debt management that balances immediate financial relief with long-term strategic positioning.

Search Minerals is primarily focused 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. The company controls two deposits (Foxtrot and Deep Fox), two drill-ready prospects (Fox Meadow and Silver Fox), and numerous other CREE prospects along a 64-kilometer long belt forming a CREE District in Labrador. Additional information about the company's activities and updates can be found in their newsroom at https://ibn.fm/SHCMF. 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.

This debt settlement transaction occurs within a broader context of increasing global demand for rare earth elements, which are essential components in various high-tech applications including electronics, renewable energy technologies, and defense systems. By strengthening its balance sheet through this shares-for-debt arrangement, Search Minerals positions itself to continue developing its mineral assets without the immediate pressure of cash debt repayment. The full details of this transaction are available in the company's press release at https://ibn.fm/S3raI. This approach to financial management demonstrates how resource companies can leverage equity instruments to manage obligations while preserving operational capital for exploration and development activities in competitive mineral markets.