Luca Mining Corp. Successfully Repurchases Convertible Debenture and Reduces Debt by 39%

Luca Mining Corp. Achieves Significant Debt Reduction Through Strategic Debenture Repurchase

Luca Mining Corp. (TSXV: LUCA, OTCQX: LUCMF, Frankfurt: Z68), headquartered in Vancouver, British Columbia, has successfully negotiated an agreement that significantly improves its financial standing. Alongside Jaluca Limited, an independent corporation, Luca has reached a deal with Urion Holdings (Malta) Limited to buy back its convertible debenture worth US$5.8 million. This marks an important milestone for the company, reflecting its commitment to enhancing shareholder value and ensuring financial stability.

Under the terms of this agreement, Luca and Jaluca will acquire 100% of the convertible debenture, with Luca purchasing 43% and Jaluca 57%. The total cost for this transaction amounts to US$7.2 million, equating to CAD$0.4338 per share, which is over 25% lower than Luca's share closing price of $0.58 on January 3, 2025. Following the cancellation of its portion of the debenture, Luca is set to decrease its fully diluted shares outstanding by approximately 10.3 million shares, accounting for around 4.4% of total shares.

This buyback initiative not only eliminates the US$5.8 million liability from Luca's balance sheet but also signifies a robust strategy aimed at attaining a stronger financial position. Post-transaction, Luca anticipates having approximately 221.4 million shares outstanding and total debt reduced to around US$11.1 million, reflecting a substantial decrease of nearly 39% since October 2024. This progressive reduction of corporate debt fortifies the company’s balance sheet, preparing it for future growth opportunities.

The funding for this repurchase was facilitated through the successful exercise of 8.7 million warrants in December 2024, generating proceeds of CAD$4.4 million. As a result of these recent activities, the company now holds a cash reserve of roughly US$6.75 million, net of the debenture purchase and loan repayments.

Luca Mining's CEO, Dan Barnholden, expressed elation regarding the transaction, remarking, "As we have committed to our shareholders, we are dedicated to repaying our debt and minimizing outstanding shares as swiftly as possible. This buyback positions us to effectively reduce our shares at a significant discount, while simultaneously bolstering our balance sheet. Our commitment to shareholder value creation is clear, and we are executing a well-defined growth strategy."

In 2025, Luca projects to be free of debt, leveraging proceeds from ongoing warrant exercises, thereby reinforcing its strategic objectives. The company's approach includes the realization of free cash flow from its two producing mines, the Campo Morado and Tahuehueto operations. With exploration currently underway at the Tahuehueto project, focused on resource expansion and mine life extension, and an optimization program enhancing efficiency at Campo Morado, Luca Mining is poised for transformative growth in the upcoming year.

About Luca Mining Corp.

Luca Mining Corp. is a diversified Canadian mining entity operating two mines within the Sierra Madre mineralized belt in Mexico. The company specializes in producing essential metals, including gold, copper, zinc, silver, and lead. Each of its mines shows considerable potential for development and expanded resource extraction. The Campo Morado facility, located in Guerrero State, is currently undergoing optimization to boost its operational efficiency and fiscal performance. The Tahuehueto Gold and Silver Mine in Durango State is also nearing commercial production, expected in the first quarter of 2025.

The technical data presented in this announcement has been verified by Mr. Paul Gray, the Vice-President of Technical Operations at Luca Mining, verifying compliance with National Instrument 43-101.

In summary, this strategic repurchase of Luca Mining's convertible debenture signifies a solid step towards financial recovery and operational enhancement. Luca Mining is on a path to becoming a debt-free and cash-flow-positive organization, thereby creating lasting value for its shareholders.