Abitibi Metals Secures Strategic Financing Led by Discovery Silver at 9.9% Stake

Discovery Silver will acquire approximately 9.9% of Abitibi Metals through a non-brokered private placement of charity flow-through shares at C$0.85 and hard dollar shares at C$0.58, with a participation agreement granting rights to maintain its shareholding position. 

Company Overview

Abitibi Metals Corp. (CSE: AMQ | OTCQB: AMQFF) is a Canadian exploration company focused on copper projects in Quebec. The company's flagship asset is the B26 Deposit, a polymetallic copper-zinc-gold-silver deposit located in the Abitibi Greenstone Belt. Abitibi Metals also holds the Beschefer Project and a portfolio of grassroots exploration properties in Quebec. 

Discovery Silver Establishes Strategic Position Through Two-Tier Equity Structure

Abitibi Metals has structured a C$30,752,228 non-brokered private placement with Discovery Silver Corp., establishing a 9.9% strategic stake on a non-diluted basis. The offering combines 11,764,706 charity flow-through common shares at C$0.85 per share with 35,779,704 hard dollar common shares at C$0.58 per share. Discovery Silver will receive financing and participation rights through a participation agreement, subject to certain conditions, enabling the investor to maintain its shareholding interest in Abitibi Metals alongside other customary investor rights.

President and Chief Executive Officer Jonathon Deluce positioned Discovery Silver's participation as validation of Abitibi Metals' B26 Deposit:

"Their participation represents a strong endorsement of the progress and potential of the B26 Deposit. They have established a strong track record of generating shareholder returns through disciplined exploration, operational excellence, and the early identification of high-quality opportunities." 

The two-tier pricing structure reflects the tax attributes embedded in the flow-through shares. Flow-through financing allows Canadian exploration companies to transfer tax deductions to investors, with charity flow-through shares providing additional provincial tax credits in Quebec. 

Participation Agreement Grants Strategic Investor Anti-Dilution Mechanisms

The participation agreement between Abitibi Metals and Discovery Silver grants the strategic investor financing and other participation rights to maintain its shareholding interest in the company. These rights, subject to certain conditions, function as anti-dilution mechanisms that allow Discovery Silver to participate in future equity offerings proportionate to its ownership stake.

The 9.9% threshold positions Discovery Silver below the 10% ownership level that triggers early warning disclosure requirements and potential changes in reporting obligations under Canadian securities regulations.

Flow-Through Proceeds Directed to Quebec Exploration Under Canadian Tax Compliance Framework

Gross proceeds from the charity flow-through share issuance will fund eligible Canadian exploration expenses qualifying as flow-through mining expenditures under subsection 127(9) of the Income Tax Act (Canada). These expenditures, as defined in subsection 66.1(6) of the Income Tax Act, must be incurred on Abitibi Metals' Quebec-based projects.

Net proceeds from the hard dollar share issuance carry no spending restrictions, allowing Abitibi Metals to allocate these funds to exploration and development activities as well as general corporate purposes.

The offering remains subject to receipt of all necessary regulatory approvals, including completion of Abitibi Metals' filing requirements with the Canadian Securities Exchange. All securities issued pursuant to the offering will be subject to a statutory hold period of four months and one day in accordance with applicable securities laws.

Next Steps

The company has not disclosed a specific closing date for the offering in the April 23, 2026 announcement. Upon closing, Discovery Silver will acquire approximately 9.9% of Abitibi Metals' issued and outstanding common shares on a non-diluted basis, with the participation agreement taking effect to grant financing and other participation rights.

Following the closing and statutory hold period expiration, Abitibi Metals will deploy the flow-through proceeds to incur eligible Canadian exploration expenses on its Quebec-based projects within the timelines required under the Income Tax Act. The company will allocate the hard dollar proceeds to exploration and development activities as well as general corporate purposes. The announcement does not specify exploration targets, drill programs, or development milestones for the B26 Deposit or other projects that will be funded by the offering proceeds.