Denarius Metals Commences Mining at Zancudo Project in Colombia

Denarius Metals Corp. has marked a significant milestone with the commencement of mining activities at its Zancudo Project in Colombia. This development not only signifies the start of a new chapter for the company but also underscores the strategic importance of the project in the broader mining landscape. The Zancudo Project, located in the Municipality of Titiribí, Department of Antioquia, is poised to become a cornerstone of Denarius Metals' operational portfolio, with early production already being stockpiled and first deliveries to Trafigura scheduled for the end of April 2025.

The Zancudo Project is a gold and silver deposit with a rich history dating back over 250 years. The project consists of three adjoining mining concession contracts and one exploration license, covering a total area of 1,054 hectares. The site is surrounded by several large producers and has access to labor, the Colombian national power grid, and ample water resources, making it an ideal location for mining operations.

The commencement of mining activities at Zancudo is a testament to the company's strategic planning and execution. In 2024, Denarius Metals prioritized its focus on the Zancudo Project and its investment in the Aguablanca Project in Spain, both of which are expected to come into operation within the next 12 months. This strategic focus has allowed the company to advance development and construction at the project site, obtain the necessary mining license, and approve the environmental impact study, paving the way for the start-up of the company's first mining operation amidst a strong rally in gold and silver prices.

The company's mine contractor is embarking on a development plan at Zancudo to open four primary fronts over the next 4 to 6 months. In parallel, early production activities are being carried out by the mine contractor, with mining already taking place in certain areas that are currently accessible. Ore is being stockpiled by the mine contractor at the site, and deliveries of the ore to Trafigura Pte. Ltd. under the company's offtake contract will commence by the end of April. Meanwhile, all processing plant equipment has been received and is in storage at the project site. Earthworks will be commencing shortly, and installation of the processing plant will take place over the summer. The plant is expected to be operational by the fourth quarter of 2025, at which point the company will produce concentrates to be delivered to Trafigura.

The strategic partnership with Trafigura is a key factor in the success of the Zancudo Project. In April 2024, Denarius Metals signed an eight-year offtake contract with Trafigura for Zancudo’s gold-silver concentrate production. This contract ensures that 100% of the concentrate production will be sold at market prices, providing a guaranteed revenue stream. Additionally, the company secured a $9 million prepayment financing from Trafigura to fully fund the completion of construction activities at the Zancudo Project. This financing is structured in instalments, with the company having already received $2.5 million and expecting up to an additional $6.5 million in two further instalments as certain milestones are reached in 2025.

The financial stability and operational efficiency of the Zancudo Project are further enhanced by the company's strategic investments and partnerships. In 2024, the company used a total of $22.1 million to fund its investing activities, with expenditures attributable to the Zancudo and Aguablanca Projects representing a total of $18.7 million. To fund these investing activities, the company raised aggregate net proceeds of $20.3 million through several financings, including $4.7 million through the sale of a net smelter royalty on Zancudo’s future production and a total of $15.6 million through three private placements resulting in the issuance of additional Convertible Debentures, common shares, and warrants. In March 2025, the company completed a non-brokered private placement of common shares and warrants, raising additional net proceeds of approximately $4.6 million.

The Zancudo Project is expected to provide economic revival to the Municipality of Titiribí and the surrounding area. Denarius Metals is working closely with the local community to incorporate its ESG programs as part of the development of this project. The project's success will not only benefit the company but also contribute to the economic growth and development of the region.

In conclusion, the commencement of mining activities at the Zancudo Project marks a significant milestone for Denarius Metals Corp. The strategic partnership with Trafigura, the company's financial stability, and its commitment to ESG programs position the Zancudo Project for success. As the project progresses, investors and stakeholders will be closely monitoring the key financial metrics and milestones to assess the project's success and profitability. With the operationalization of the processing plant and the commencement of deliveries to Trafigura, the Zancudo Project is poised to become a cornerstone of Denarius Metals' operational portfolio, contributing to the company's long-term growth and success.