Cobre del Mayo, S.A. de C.V. Launches Exchange Offer for Senior Secured Notes

Cobre del Mayo, S.A. de C.V. Initiates Exchange Offer for Senior Secured Notes

Cobre del Mayo, S.A. de C.V. (commonly referred to as CDM) has recently made headlines with its announcement regarding a significant financial maneuver—the launching of an Exchange Offer targeted at Eligible Holders of its outstanding Senior Secured PIK Toggle Notes due in 2030. The company has a principal amount of $146,558,173, which is now on the table for exchange as part of this strategic plan.

The new offering allows holders of the existing notes to exchange them for new Senior Secured PIK Toggle Notes due in 2032. This proactive initiative serves a dual purpose: it aims to realign the company's debt servicing obligations with its anticipated cash generation capabilities. In essence, CDM seeks to optimize its financial structure to foster sustainable growth and financial health.

Aiming for Financial Robustness

The Exchange Offer is seen as a critical step in enhancing the company's balance sheet. By proposing new notes with an extended maturity, CDM aims to free up more cash flow to deal with senior debt obligations while also tackling contingent risks. This move is crucial for the company as it looks to stabilize its operations and bolster working capital levels. It’s important to note that CDM does not foresee being capable of making any payments on the outstanding existing notes after the expiration of this Exchange Offer, emphasizing the urgency and necessity behind this strategic shift.

Structural Support and Guarantees

To bolster confidence among investors and noteholders, the new notes will be fully, unconditionally, and irrevocably guaranteed by certain direct and indirect wholly-owned subsidiaries of Frontera Copper Corporation, S.A.P.I. de C.V., the parent company of CDM. This guarantee is crucial as it displays a level of commitment and security for the holders of the new notes, providing them with a safety net that enhances their investment likelihood. However, it’s worth noting that the notes will not be guaranteed by Frontera itself.

Compliance and Conditions

In rolling out this Exchange Offer, CDM is navigating through the intricacies of securities regulations. The New Notes are not registered under the Securities Act or any state securities laws, which means the Exchange Offer is strictly being made to registered holders of Existing Notes outside the U.S., in accordance with Regulation S. This legislative framework is crucial for maintaining legal compliance while allowing eligible holders to step into a potentially more favorable investment scenario.

For those interested in the finer details of this offering, a Confidential Exchange Offer Memorandum dated July 22, 2025, has been released. Interested Eligible Holders can reach out to Ipreo LLC, the Exchange Agent and Information Agent, to obtain this document which outlines the terms and conditions in detail.

The Importance of this Offering

Navigating the complexities of the financial market can be challenging, particularly for companies like CDM that operate within the volatile sector of mining and natural resources. By initiating this exchange offer, Cobre del Mayo is taking proactive steps to ensure its future stability amidst economic uncertainties.

As it moves forward, CDM's management remains focused on leveraging its cash flow to enhance operational efficiency and deal effectively with the obligations it currently faces. The Exchange Offer stands as a testament to the company’s commitment to ensuring its financial viability and creating value for its stakeholders in the years to come.

For further inquiries or more information, interested parties are encouraged to contact BCP Securities, Inc., the Dealer Manager for the Exchange Offer.

This announcement is not an offer to sell securities, and it does not constitute a solicitation to buy notes in any jurisdiction where such solicitation isn't lawful, ensuring compliance with all relevant laws and regulations as the company undertakes this exchange process.