Falco Overhauls Finances, Taps New Chair to Push Horne 5 Project Forward

MONTRÉAL, Dec. 16, 2025 – Falco Resources Ltd. (TSX.V: FPC) has executed a significant financial and corporate overhaul, securing crucial extensions on its senior debt and appointing a new Chair of the Board, moves aimed at providing the stability needed to advance its flagship Horne 5 gold and base metal project in Québec.

In a series of announcements that signal a pivotal moment for the mineral exploration company, Falco confirmed the successful closing of amended debt agreements with key financiers OR Royalties Inc. and Glencore Canada Corporation. Concurrently, the company announced that board member Alexander Dann, a seasoned financial executive with deep ties to Falco's largest shareholder, will take the helm as Chair of the Board. These developments provide the company with critical financial runway as it navigates the final permitting stages for one of Eastern Canada's most significant undeveloped mining assets.

A Financial Lifeline for a Giant Project

At the core of the announcement is a comprehensive restructuring of Falco's senior debt, a move that alleviates immediate financial pressure. The maturity dates for both the OR Royalties Loan and the Glencore Debenture have been extended by one year to December 31, 2026.

Under the amended terms, accrued interest on the loans up to the end of 2025 has been capitalized, meaning it is added to the total principal owed. This increases the principal of the OR Royalties Loan to approximately $26.1 million and the Glencore Debenture to roughly $15.4 million. While this increases the company's overall debt load, it crucially defers immediate cash interest payments, preserving capital for operational and development activities. The interest rates on the loans remain unchanged at 9% and 10%, respectively.

For a pre-revenue company like Falco, whose primary focus is advancing the capital-intensive Horne 5 project, this financial "breathing room" is indispensable. It allows management to focus resources on critical path items, such as permitting and engineering, without the looming threat of near-term debt maturities. The 2021 feasibility study for Horne 5 estimated initial capital costs at over $844 million, underscoring the importance of a stable financial foundation to attract future project financing.

New Leadership with Strong Backing

Signaling a strategic shift in governance, the company appointed Alexander Dann as the new Chair of the Board. Mr. Dann, a Chartered Professional Accountant with over two decades of experience in the mining and manufacturing sectors, has served on Falco’s board since 2021. He succeeds Mario Caron, who will remain on the board as lead director, ensuring a measure of continuity in the leadership transition.

Mr. Dann's appointment is particularly noteworthy due to his concurrent role as Chief Financial Officer of Osisko Development Corp., which stands as Falco’s largest shareholder with an approximate 16% stake. This connection suggests a strong alignment between Falco's board leadership and the strategic interests of its primary financial backer. His extensive background, which includes senior finance roles at major industry players like Falconbridge Ltd. (now part of Glencore) and experience guiding companies through public listings and acquisitions, points to a renewed focus on financial discipline and strategic execution.

This leadership change is widely seen as a move to instill confidence in the market and position the company to navigate the complex financing and development challenges ahead for the Horne 5 project. With a leader at the helm who possesses deep financial acumen and a direct link to a major development-focused investor, Falco appears to be gearing up for its next critical phase of growth.

The Price of Stability: Warrants and Shareholder Value

The financial stability secured through the debt extensions comes at a price for existing shareholders: potential share dilution. As consideration for the extended maturity dates, Falco will issue a substantial number of new common share purchase warrants to its lenders.

OR Royalties will receive 19,332,237 new warrants, each allowing the purchase of one Falco share at $0.58. Glencore will be issued 21,381,422 new warrants with tiered exercise prices: 15,061,158 at $0.38 per share and the remaining 6,320,264 at $0.42 per share. In total, over 40.7 million new warrants will be issued, all expiring on December 31, 2026.

Based on Falco's current outstanding shares, the full exercise of these new warrants could result in dilution of approximately 11.4%. With Falco's stock trading at C$0.4150 on Tuesday, a portion of the warrants issued to Glencore are already "in-the-money," making their eventual exercise more probable should the stock price hold or increase.

This trade-off is a common reality for development-stage mining companies. While dilution can be a concern for equity holders, the alternative—a potential default or a forced, deeply discounted equity financing—is often far more damaging. By restructuring its debt and issuing warrants, Falco has opted for a solution that preserves its viability and keeps the long-term value proposition of the Horne 5 project intact for all stakeholders.

The Road Ahead for Quebec's Giant Gold Project

With its finances shored up and leadership aligned, Falco's focus returns squarely to the Horne 5 project itself. Located in the prolific Abitibi greenstone belt beneath a historic mine that produced over 11 million ounces of gold, Horne 5 represents a world-class polymetallic deposit.

The company is currently updating its 2021 Feasibility Study, with results expected in the second quarter of 2026. This update aims to incorporate more recent commodity price forecasts and optimize project economics. The original study outlined a robust 15-year operation projected to produce an average of over 220,000 ounces of gold annually at highly competitive costs.

However, the most critical near-term catalyst remains the receipt of the ministerial decree from the Québec government, the final major authorization required to begin construction. The company has completed the public hearing process and continues to work with authorities to secure this permit. The successful debt restructuring provides the necessary stability to confidently navigate this final regulatory hurdle, demonstrating to both government and potential partners that Falco is well-positioned to execute on its development plan once the green light is given. The market will be watching closely for any news on the permitting front, as it represents the key that could unlock the immense value of the Horne 5 deposit.