Abitibi Metals Consolidates 100% of B26: Why Full Ownership Is a Development Prerequisite

• Abitibi Metals has agreed to acquire SOQUEM's 20% interest in the B26 polymetallic deposit for approximately C$7 million in initial consideration, consolidating 100% ownership and terminating the existing joint venture.
• B26 carries a combined resource of 25.3 million tonnes at copper-equivalent grades above 2%, with an 80,000-metre-plus drill programme underway and a preliminary economic assessment (PEA) and updated resource estimate both targeted for the first quarter of 2027.
• The transaction includes staged milestone payments totalling C$12 million beyond the initial consideration, with claw-back provisions that can restore a project interest and net smelter return royalty to SOQUEM if feasibility and construction decision thresholds are not met within defined timeframes.
• Full ownership removes joint-venture governance constraints at the stage when Abitibi must coordinate financing structures, infrastructure planning, and regional consolidation across the Selbaie Camp without a co-owner's input.
• A C$31 million financing was completed with no warrants issued, funding the company through to the first-quarter 2027 PEA milestone.

What Has Happened

Abitibi Metals Corp. (CSE: AMQ | OTCQB: AMQFF | FSE: FW0) has agreed to acquire the remaining 20% interest in its B26 polymetallic deposit from SOQUEM, a subsidiary of Investissement Québec, for approximately C$7 million in initial consideration. Prior to the transaction, Abitibi held an 80% interest in B26 under an option agreement initiated in 2023, with SOQUEM retaining the balance under an existing joint venture and royalty arrangement. The acquisition brings Abitibi to 100% ownership, terminates the joint venture, and replaces the prior royalty with a restructured net smelter return arrangement. The transaction closes out a shared governance structure at a time when Abitibi is executing its largest drill programme to date and preparing for a preliminary economic assessment (PEA) and a resource update targeted for the first quarter of 2027.

B26 Deposit & Resource Status

B26 is a polymetallic volcanogenic massive sulphide (VMS) deposit in Quebec carrying a combined resource of 25.3 million tonnes. The indicated category totals 12.96 million tonnes grading 2.08% copper equivalent, with contributing grades of 1.19% copper, 1.16% zinc, 0.44 grams per tonne gold, and 30.8 grams per tonne silver. The inferred category adds 12.34 million tonnes at 2.20% copper equivalent, grading 1.60% copper, 0.16% zinc, 0.68 grams per tonne gold, and 8.1 grams per tonne silver.

The resource is the target of an 80,000-metre-plus campaign that Abitibi describes as the largest drill programme in its history, incorporating the ongoing Phase 4 expansion and discovery programme. Metallurgical and geotechnical test work is running concurrently with drilling. The programme is designed to serve two distinct objectives simultaneously, both due in the first quarter of 2027: a PEA focused on near-surface economics and early deposit payback, and an updated resource estimate oriented toward defining total deposit scale and mine life.

President and Chief Executive Officer of Abitibi Metals, Jonathon Deluce, is precise on the dual-objective structure the 80,000-metre programme must serve:

"Let's start with our goals for this year and work backwards. Our goal for the first quarter is a PEA and an updated resource. So there are two objectives we've got to balance. One, the PEA is looking more near-surface, and what is the early payback of the deposit? And the resource is more open-ended: how big can this deposit be, and how does that tie into overall mine life? So those are the two objectives, and we work backwards in balancing where the metres are."

Transaction Structure & Contingent Obligations

The initial C$7 million in consideration is structured as C$5 million in cash and C$2 million in Abitibi Metals shares. The cash component is payable within 90 days of closing and is subject to a reduction equal to 20% of exploration expenditures Abitibi incurs and attributes to SOQUEM's interest during that period. SOQUEM retains a 1% net smelter return (NSR) royalty on B26, replacing the terminated 2023 joint-venture royalty.

Two deferred milestone payments, each of C$6 million, are payable 50% in cash and 50% in shares. The first is triggered at the feasibility study stage or within a maximum of 3 years from closing; the second is triggered at the construction decision stage or within a maximum of 5 years from closing.

The agreement also embeds claw-back provisions tied to each milestone. If Milestone 1 is not met, SOQUEM receives an additional 1% NSR, bringing its total royalty to 2%, alongside a 12% project interest in B26. If Milestone 2 is not met, an additional 0.5% NSR is added, bringing the cumulative total to 1.5%, along with a 6% project interest. Abitibi retains the right to repurchase any additional NSR activated under either provision for C$2 million.

Why Unencumbered Ownership Matters at the PEA Stage

At the resource stage, a majority interest is generally sufficient to advance technical work. At the transition to development, the set of decisions that must be made expands significantly: financing structures need to be negotiated on terms that reflect a single project owner, infrastructure and processing decisions require unified authority, and discussions with potential strategic partners or offtake counterparties are complicated by shared project governance. Full consolidation removes those constraints when each of them becomes active simultaneously.

For B26 specifically, the Selbaie Camp carries potential for regional consolidation beyond the deposit's current boundaries. Evaluating and acting on those opportunities requires the ability to move without a co-owner's consent. Full ownership also provides Abitibi with unencumbered exposure to future resource growth and project economics as the drill programme continues to define the deposit's extent.

Capital Structure & Development Runway

Abitibi completed a C$31 million financing with no warrants issued, funding the company through to the first-quarter 2027 PEA milestone. The financing position supports execution of the full 80,000-metre programme and concurrent technical workstreams without a further capital raise before the PEA is delivered.

The shareholder register includes a 9.9% strategic stake held by Discovery Silver, with institutional investors accounting for 40% of the register. Management and SEDI holders represent 13%, high-net-worth and strategic investors a further 13%, the Deluce Family Office 7%, and SOQUEM 5%.

Deluce frames the financing position in terms of what it now makes possible across drilling, study work, and regional consolidation:

"We now have a war chest to deliver 80,000 metres-plus of drilling, to deliver the PEA, to put a huge dent into our feasibility study, to enable additional acquisitions that allow us to showcase a large camp-wide approach with B26 and the area."

Broader Context

Abitibi currently trades at an enterprise value equivalent to 0.8% of its in-situ resource value. Foran Mining's McIlvenna Bay, a comparable Canadian VMS deposit, was acquired by Eldorado Gold for approximately C$3.8 billion, representing 20.4% of its in-situ value at the time of acquisition. FireFly Metals, an advanced-stage VMS developer, sits at 3.5% on the same measure.

B26 sits at a comparable point on the development curve to where Foran Mining was positioned ahead of its major re-rating through the PEA and feasibility stages.

Deluce is direct about what the Eldorado/Foran transaction signals for the VMS market:

"I think the consistency is how rare these deposits are in the marketplace. And we look at the recent closing of the Foran takeover by Eldorado for almost $4 billion. It showcases the demand for these in the market, but also how rare they are. There are very few of these available across Canada that have the size and scale like B26 and like McIlvenna Bay does, now with Eldorado."

What to Watch Next

The first-quarter 2027 target for the PEA and updated resource estimate establishes the primary near-term milestone. Delivering both outputs simultaneously requires the ongoing 80,000-metre-plus drill programme and concurrent metallurgical and geotechnical test work to remain on schedule.

Beyond the PEA, the transaction structure creates two time-bound triggers that will test Abitibi's ability to execute the development path it has now consolidated. Milestone 1, linked to the feasibility study stage, must be reached within a maximum of 3 years from closing; Milestone 2, tied to the construction decision, within a maximum of 5 years. Missing either threshold activates the claw-back provisions embedded in the SOQUEM agreement.

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