Lion One Metals Extends Loan Repayment to December 2026 via Forbearance Deal with Nebari

Details of Forbearance Agreement and Restructuring Fee

Lion One Metals secured the forbearance agreement with Nebari Gold Fund 1, LP, Nebari Natural Resources Credit Fund I, LP, and Nebari Natural Resources Credit Fund II, LP. This agreement extends the final repayment date for Tranche 1 of the senior secured loan facility to December 31, 2026. In exchange, the company agreed to pay Nebari a restructuring fee of US$2 million.

If Lion One Metals fully repays all obligations under the facility by September 30, 2026, the restructuring fee will be reduced to US$1 million. This arrangement incentivizes accelerated repayment while reflecting the lenders’ cooperation. The forbearance agreement mandates ongoing compliance with all loan facility obligations.

Resolution of Default Events and Interest Rate Reinstatement

The company confirmed it has cured all financial and non-financial defaults under the loan facility. On January 31, 2026, Nebari notified Lion One Metals of a non-financial covenant default, which led to an increased margin on the interest rate effective February 20, 2026. A second default occurred on March 31, 2026, when the company breached a US$7 million working capital covenant.

With both defaults resolved, the loan facility’s interest rate returned to original terms. Lion One Metals used part of the net proceeds from a recent US$17.5 million non-brokered private placement of convertible debenture units and equity units to meet payment obligations and cure the working capital breach. This restructuring underscores the company’s commitment to restoring compliance and normal lending conditions.

Structure and Terms of Nebari Loan Facility

Initially signed in January 2023, the senior secured loan facility with Nebari consists of three tranches, all drawn. Tranche 1 has approximately US$25.8 million outstanding including capitalized interest, Tranche 2 has about US$5.4 million outstanding, and Tranche 3 has been fully repaid. Total principal outstanding is approximately US$31.2 million.

Interest rates differ by tranche: Tranche 1 carries 8% plus the three-month secured overnight financing rate (SOFR), with amortization at maturity 42 months from the original closing date and no closing fees. Tranche 2 includes an 8% original issue discount, interest at 10% plus SOFR, progressive amortization over 42 months from its December 29, 2023 funding date, and 2% closing fees.

Refinancing Strategy and Capital Structure Plans

Lion One Metals is pursuing a refinancing strategy aimed at repaying the loan facility by the end of 2026. This strategy may involve securing a new senior debt facility or a combination of financing methods such as debt instruments, equity offerings, and operational cash flow deployment.

The forbearance agreement provides the company a timeframe to explore alternative funding and operational improvements to manage debt obligations. Stakeholders will likely monitor upcoming updates on the refinancing progress.

Operations at Tuvatu Gold Project

Based in North Vancouver, British Columbia, Lion One Metals is an emerging Canadian gold producer. In late 2023, it commenced operations at its wholly owned Tuvatu Alkaline Gold Project in Fiji, which includes the high-grade Tuvatu Alkaline Gold Deposit, Underground Gold Mine, Pilot Plant, and Assay Lab, marking a significant operational milestone.

The company also holds a broad exploration license covering the Navilawa Caldera, home to multiple mineralized zones and promising exploration targets, positioning it for potential resource expansion. However, current priorities focus on capital structure stabilization and debt management.

Financial and Non-Financial Covenant Breaches

The default events in early 2026 reflect financial and operational challenges. The January 2026 non-financial covenant breach triggered a margin increase on the interest rate, raising borrowing costs. The March 2026 breach involved the US$7 million working capital covenant.

While details on the non-financial breach remain undisclosed, the company’s cure of both defaults via private placement proceeds and payments to Nebari indicates resolution. Reinstatement of original interest rates reduces future financing expenses, aiding the refinancing plan.

Use of Private Placement Proceeds

The US$17.5 million non-brokered private placement of convertible debenture and equity units provided essential liquidity to address default events. Portions of the net proceeds were allocated to satisfy Nebari payment obligations and cure the working capital covenant breach, a vital step toward financial stabilization.

The deployment of these funds toward debt service rather than operational growth highlights management’s focus on liquidity and debt reduction. Specific allocations and terms of the convertible securities and equity units issued were not disclosed.

Interest Rate and Amortization Details

The loan facility’s interest rates are tied to SOFR, making borrowing costs sensitive to Federal Reserve short-term rate changes. Tranche 1’s 8% plus SOFR differs from Tranche 2’s 10% plus SOFR, reflecting varying risk profiles or funding timelines.

Both tranches amortize over 42 months from their respective funding dates, requiring consistent debt service capability. The forbearance agreement’s extension to December 31, 2026, accelerates Tranche 1’s repayment timeline, emphasizing the need for timely refinancing execution.

Compliance and Ongoing Forbearance Commitments

The forbearance agreement does not waive loan obligations but requires strict adherence going forward. Future covenant breaches could trigger additional defaults and interest rate hikes, as seen earlier in 2026.

Nebari will closely monitor compliance, especially regarding the previously breached working capital covenant. Operational performance and working capital management are critical to the agreement’s success and the company’s refinancing efforts.