Varvara Secures C$15M to Advance Romanian Gold Project

VANCOUVER, BC – April 17, 2026

Varvara Development Group has successfully closed a C$15 million private placement, injecting vital capital into its ambitious plan to develop a cyanide-free gold mine in Romania. The financing saw significant participation from company insiders and major shareholder Eldorado Gold Corporation, which used the opportunity to solidify its strategic position in the junior developer.

The non-brokered deal involved the issuance of over 2.7 million common shares at a price of C$5.46 each. According to the company, the proceeds are earmarked for general working capital and administrative expenses as it advances its flagship Certej project. The transaction underscores the complex web of financing, strategic partnerships, and governance that characterizes the high-stakes world of junior mining.

Eldorado Gold's Calculated Investment

A key element of the financing is the deepened involvement of Eldorado Gold. The major gold producer increased its beneficial ownership in Varvara from approximately 16.9% to a commanding 19.9%, exercising a contractual right established when it first divested the Certej project.

This move is not a simple portfolio investment but the culmination of a longer-term strategy. Eldorado sold the Romanian asset to Varvara (then O Rei Resources Corp.) in a deal valued up to US$30 million, a move aimed at streamlining its own portfolio to focus on core operations in Canada, Greece, and Türkiye. However, Eldorado never fully walked away. The sale agreement included a 1.5% net smelter return (NSR) royalty on future production and an investor rights agreement, ensuring it would retain a significant financial interest and influence in the project's future.

By increasing its stake to the 19.9% threshold, Eldorado maximizes its exposure to the Certej project's potential upside without bearing the direct operational and development risks. This structure allows the major to benefit from future production through both its equity position and its royalty, positioning itself advantageously should Varvara succeed in bringing the mine online. The investment, totaling nearly C$4 million in this round, signals strong confidence from a seasoned industry player in Varvara's management and the viability of the Certej asset.

A Bet on Sustainable Mining in a Sensitive Region

The C$15 million infusion is critical for Varvara's mission to build what it describes as a "safe, sustainable and cyanide-free" mining operation. This commitment is more than just corporate branding; it is a direct response to Romania's complex history with mining and a key element of the project's social license to operate.

The Certej project is located in a country still scarred by the memory of the 2000 Baia Mare cyanide spill, one of Europe's worst environmental disasters. That event created intense public and political opposition to cyanide-based gold extraction, derailing previous attempts to develop mining projects in the region. Varvara's entire strategy is built around avoiding this contentious issue, promising a modern approach that uses no cyanide and incorporates advanced waste management techniques, such as de-watering and co-disposing of tailings.

This environmentally conscious approach appears to have garnered support from the Romanian government, which holds a 19.25% stake in the project. The government's involvement and Varvara's promise of an initial €500 million investment, creating over 400 direct jobs and contributing to local land rehabilitation, frame the project as a vehicle for regional economic revitalization. The company, which changed its name to honor the patron saint of miners, is betting that this sustainable model is the only viable path forward for large-scale mining in modern Europe.

The Intricacies of Insider Financing

The structure of the C$15 million private placement highlights the common, yet often scrutinized, practice of insider-led financing in the junior resource sector. Alongside Eldorado Gold, several of Varvara's own directors and officers participated in the offering, purchasing shares and demonstrating their personal commitment to the company's path forward.

The transaction was structured as a "related party transaction" under Canadian securities law but was exempt from the formal valuation and minority shareholder approval requirements. The company relied on exemptions within Multilateral Instrument 61-101, arguing that the value of shares issued to insiders did not exceed 25% of the company's market capitalization. While this is a standard and legal mechanism designed to allow companies to raise capital efficiently, it places significant reliance on the board of directors to ensure fair dealing. Varvara noted that directors with a personal interest abstained from voting on their own participation.

Further complicating the deal, the financing also settled a C$137,000 loan previously made to the company by director Mr. Myerson. He received shares in lieu of a cash repayment, a "shares for debt" transaction that helped preserve the company's cash on hand. These interwoven financial dealings, while necessary for a non-revenue-generating developer, underscore the importance of transparency and strong governance as Varvara navigates its development phase and seeks to maintain investor confidence. The capital raised is a crucial lifeline, but the road to production remains long and expensive. The deferred payments owed to Eldorado, contingent on hitting key milestones like license extensions and achieving commercial production, serve as a constant reminder of the significant hurdles that still lie ahead.