Versamet Royalties Corporation (“Versamet”) announces that it has entered into an agreement (the “Agreement”) with Endeavour Silver Corp. and certain of its wholly-owned subsidiaries (collectively “Endeavour Silver”), to support the proposed acquisition of Compañia Minera Kolpa, the owner of the polymetallic Huachocolpa Uno mine located in the district of Huachocolpa within the province and department of Huancavelica, Peru (collectively “Kolpa”).

Pursuant to the terms of the Agreement, Versamet will acquire a copper stream on Kolpa for total up-front cash consideration of US$35 million.

“We are very happy to announce this transaction to support Endeavour Silver’s acquisition of Compañia Minera Kolpa,” said Dan O’Flaherty, CEO of Versamet. “Kolpa has been in continuous production for more than 25 years and we believe that under the ownership of Endeavour Silver, it will continue to produce for many years to come. Adding this copper stream will have a meaningful and immediate positive impact on our already robust free-cash flow generating royalty and streaming business.”

Transaction Highlights
Immediate Cash Flow from a Producing Mine in Peru: Kolpa has been in continuous operation for more than 25 years and has a long history of reserve replacement and resource expansion.
High-Quality Partner: Endeavour Silver is an emerging senior silver producer that, post-acquisition, will produce nearly 20 million silver equivalent ounces annually. Endeavour Silver has the technical, operational, and financial capability to invest in and deliver on the full potential of Kolpa.
Complementary and Timely Exposure to Copper Prices: Addition of a producing copper stream to our current gold-centric royalty and streaming portfolio diversifies overall business at an opportune time in copper markets.
Bolsters Already Strong Cash Flowing Portfolio: In each of 2023 and 2024, Kolpa produced approximately 1.1Mlbs of copper in concentrate. At a copper price of US$4.50/lb., under the terms of the Agreement, Versamet would have generated revenue of US$5 million per annum, representing an approximate 40% increase over Versamet’s actual 2024 revenues.
Significant Upside Potential: Kolpa has successfully undergone numerous expansions to reach its currently installed capacity of 2,000tpd, with permitting in progress for an additional expansion to 2,500tpd, which has the potential to increase production levels and amounts delivered under the stream. Additionally, the overall land package at Kolpa remains significantly underexplored.
Transaction Key Terms
Versamet will acquire the right to initially purchase refined copper equal to the greater of i) 95.8% of produced copper (irrespective of the copper payable under the relevant offtake agreement) and ii) 0.03 pounds of copper per pound of produced lead from Kolpa. Once 6,000 tonnes of refined copper have been delivered, Versamet will have the right to purchase 71.85% of produced copper. Once 10,500 tonnes of refined copper have been delivered, Versamet will have the right to purchase 47.9% of produced copper.
Versamet will make ongoing cash payments of 10% of the spot copper price for each tonne of refined copper delivered.
Endeavour has provided Versamet with a right of first refusal in respect of the sale or transfer of any royalty, stream or similar interest in respect of Kolpa. In addition, Versamet shall have the right to purchase an additional stream interest equivalent to up to 2.2% of the total revenue in future discoveries of mineral deposits at Kolpa that are processed through a new mineral processing facility with nameplate capacity of not less than 15,000 tonnes per day.
At closing, Versamet intends to fund the US$35 million purchase price with its existing revolving credit facility, which is currently undrawn.
Closing of the transaction is expected within the next 60 days.
Compañia Minera Kolpa Overview
Kolpa is a silver-focused polymetallic mining company located in the district of Huachocolpa within the province and department of Huancavelica, approximately 490 km southeast of Lima, Peru and holds 143 mining concessions 25,177 hectares and 1 beneficiation concession covering 366 hectares. Mineralization occurs mainly as polymetallic epithermal deposits rich in silver, lead, zinc and copper. Mineralized material is mined using underground mining methods (sublevel stoping and cut and fill), followed by a 2,000 tonnes per day (“tpd”) (installed capacity) concentrator plant using a conventional selective flotation process designed to obtain a bulk concentrate with a subsequent separation of lead-silver, copper-silver and zinc concentrates. In 2024, Kolpa produced around 2.0 million ounces (“oz”) of silver, 19,820 tonnes of lead, 12,554 tonnes of zinc and 518 tonnes of copper (5.1 million silver equivalent ounces (“AgEq oz”)). In 2024, the operating cost was approximately $133 per tonne, resulting in cash costs on a by-product basis of $12.58/oz Ag and all-in sustaining costs of $22.80/oz Ag. The land package remains underexplored with approximately 10% of the claims worked to date with multiple targets identified by the Kolpa exploration geologists.

For additional information on Kolpa, please see Endeavour Silver’s press release at https://edrsilver.com/news-media/news/.

For more information about Versamet Royalties please visit our website at www.versamet.com
General inquiries email: info@versamet.com.

The scientific and technical information contained in this news release has been reviewed and approved by Diego Airo, P.Eng, Vice President of Evaluations for Versamet Royalties and a member of the Association of Professional Engineers and Geoscientists of the Province of British Columbia. Mr. Airo is a Qualified Person as defined in the National Instrument 43-101 – Standards of Disclosure for Mineral Projects.

Versamet uses certain performance measures in its analysis. These non-GAAP performance measures are included in this document because these statistics are key performance measures that management uses to monitor performance to assess how Versamet is performing. These performance measures do not have a standard meaning within IFRS and, therefore, amounts presented may not be comparable to similar data presented by other companies.

Cautionary Note Regarding Forward-Looking Information