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

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 are subject to a four-month-and-one-day statutory hold period.

This transaction is significant because it demonstrates Search Minerals' strategic financial management during a period of exploration and development. By converting debt to equity, the company reduces its immediate financial obligations while maintaining operational capital for its critical mineral projects. The shares-for-debt arrangement allows Search Minerals to allocate more resources toward advancing its portfolio of rare earth elements assets without increasing debt burdens that could constrain future operations.

Since LeadFX is a related party, the transaction falls under Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions. However, Search Minerals indicated it qualifies for exemptions from formal valuation and minority approval requirements because the fair market value of shares issued does not exceed 25% of its market capitalization. The company also confirmed that no new control person will be created through this transaction.

The financial implications extend beyond simple debt reduction. For investors, this transaction suggests management is prioritizing balance sheet health while continuing to develop assets in the emerging Port Hope Simpson – St. Lewis Critical Rare Earth Elements 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 along a 64-kilometer belt. Additional information about the company's projects is available at https://ibn.fm/S3raI.

This debt settlement comes as global demand for critical rare earth elements continues to grow, driven by their essential role in clean energy technologies, electronics, and defense applications. Search Minerals' focus on these materials positions the company within a strategically important sector where supply chain security has become a priority for many nations. 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.

For stakeholders, the transaction represents a pragmatic approach to capital structure management. By avoiding additional debt instruments, Search Minerals maintains greater financial flexibility as it advances exploration and development activities. The preservation of cash is particularly important for junior mining companies operating in capital-intensive sectors, where funding exploration programs and feasibility studies requires substantial resources. More information about Search Minerals is available through the company's newsroom at https://ibn.fm/SHCMF.

The broader industry context makes this transaction noteworthy. As mining companies navigate challenging capital markets and increasing development costs, innovative financial solutions like shares-for-debt arrangements can provide necessary breathing room. For Search Minerals specifically, this move supports continued progress in Labrador's emerging rare earth elements district while demonstrating responsible financial stewardship to current and potential investors.