American Pacific Mining (USGD) M&A Announcement summary

Deal rationale and strategic fit

• Gaining 100% ownership of Palmer aligns with a focus on exploration upside and resource expansion, diverging from the former partner's production-oriented priorities.

• Full control of Palmer and Madison provides flexibility for future transactions and strategic moves.

• The project is shifting from a zinc-forward to a high-grade copper focus, enhancing its attractiveness for new partners.

• Transaction provides a clear path for renewed exploration and value creation at Palmer, which has significant mineral resource potential.

Financial terms and conditions

• Acquired 100% of Palmer and received $10 million (CAD 14 million) in cash from Dowa.

• Dowa retains an option on up to 50% of the zinc concentrate produced at Palmer for each year of production, plus certain indemnities.

• Current cash position is over CAD 16 million, with a market cap roughly half in cash.

Synergies and expected cost savings

• Consolidated ownership simplifies future deals, eliminates joint venture complexities, and enables streamlined decision-making and operational control.