Euro Sun Mining Inc. (TSX: ESM) (“Euro Sun” or the “Company”) is pleased to announce that it has entered into a convertible security funding agreement (the “Agreement”) with Lind Global Fund II, LP, an investment entity managed by The Lind Partners, a New York based institutional fund manager (together “Lind”), providing for an initial principal amount of $3.5 million and a potential additional amount of up to $1.5 million (collectivity, the “Loan Amount”) of convertible securities (the “Convertible Securities”) that will be due two years from the date of issuance. All amounts are in Canadian dollars unless otherwise indicated.

Euro Sun intends to use the funding for development expenditures at its Rovina Valley Project and for general and corporate working capital purposes.

Scott Moore, CEO stated, “We are pleased to have The Lind Partners support Euro Sun as we continue to make significant progress on permitting the Rovina Valley Project. Our updated feasibility study outlines a robust long-life project adhering to the highest environmental standards and utilizing zero cyanide. We look forward to continued success in advancing all the required permitting for construction.”

Under the terms of the Agreement, the drawn Loan Amount will accrue simple interest at a rate of 10% per annum. At the first closing, the Company will receive $3.5 million less a closing fee of $122,500 (the “Initial Loan Amount”). The Company will issue to Lind a Convertible Security with a face value of $4.2 million (the “Initial Loan Face Value”), which includes pre-paid interest of $700,000, as set out in the Agreement. Subject to mutual agreement among Lind and the Company and certain other conditions, upon the request of Euro Sun, Lind may provide a second tranche of up to $1.5 million on the same terms and conditions as the Initial Loan Amount.

Lind will have the option to convert the Convertible Securities into common shares of Euro Sun (“Shares”) at a price per Share equal to 85% of the five-day volume weighted average share price (“VWAP”) immediately prior to each conversion (the “Conversion Price”). Subject to certain conditions, Lind will be entitled to convert up to 1/24th of the Initial Loan Face Value per month into Shares.

In the event that the Conversion Price is below the Company’s chosen floor price of $0.10, the Company will have the option to repay that conversion in cash (plus a 5% premium), in lieu of issuing Shares.

Euro Sun has the right to buy-back the outstanding face value of the Loan Amount at any time with no penalty. If Euro Sun elects to exercise its buy-back rights, Lind will have the option to convert up to 33% of such face value.

Concurrently with the funding of the Initial Loan Amount, Lind will be issued 7,947,321 warrants of the Company (the “Warrants”). The Warrants will be exercisable for 48 months from the date of their issuance, subject to acceleration, with a warrant exercise price equal to $ 0.28626, being 130% of the 20-day VWAP of the Shares, immediately prior to execution of the Agreement.

The Convertible Security will be (i) secured against all of the assets and property of the Company pursuant to a general security agreement and (ii) guaranteed by SAMAX Romania Limited, a wholly-owned subsidiary of the Company organized under the laws of Cyprus, which will also provide a share pledge agreement in favour of Lind.

The Toronto Stock Exchange (“TSX”) has conditionally approved the listing of the common shares underlying the Convertible Securities and the Warrants on the TSX. The listing is subject to the Company fulfilling all of the requirements of the TSX on or before March 7, 2022. Funding of the Initial Loan Amount is expected to be completed on or before February 25, 2022.

Permitting Update

The Company is currently completing the final draft of the Planul Urbanistic Zonal (PUZ, Urban Zoning Plan) and expects to file with the County of Hunedoara in the coming weeks. Following submittal there is a mandatory 45 day waiting period before the public audience can be held on the Strategic Environmental Assessment (“SEA”) organized by the environmental protection agency of Hunedoara County. The SEA is the environmental opinion on the PUZ and incorporates approvals from approximately seventeen government bodies and institutions. We expect a positive decision on the SEA and final approval of the PUZ in late Q2 or early in Q3 2022. Once the PUZ has been approved, submittal of the notification to complete the Environmental Impact Assessment (EIA) procedure will be filed with the Ministry of Environment.

This press release shall not constitute an offer to sell or a solicitation of an offer to buy the securities described herein. The securities offered have not been registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), or applicable state securities laws, and may not be offered or sold to, or for the account or benefit of, persons in the United States or U.S. persons (as both such terms are defined in Regulation S promulgated under the U.S. Securities Act) absent registration or an applicable exemption from such registration requirements. This press release shall not constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of the securities offered in any jurisdiction in which such offer, solicitation, or sale would be unlawful.

About Euro Sun Mining Inc.

Euro Sun is a Toronto Stock Exchange listed mining company focused on the exploration and development of its 100%-owned Rovina Valley gold and copper project located in west-central Romania, which hosts the second largest gold deposit in Europe.

For further information about Euro Sun Mining, or the contents of this press release, please contact Investor Relations at info@eurosunmining.com.

About The Lind Partners

The Lind Partners manages institutional funds that are leaders in providing growth capital to small- and mid-cap companies publicly traded in the US, Canada, Australia and the UK. Lind’s funds make direct investments ranging from US$1 to US$30 million, invest in syndicated equity offerings and selectively buy on market. Having completed more than 100 direct investments totaling over US$1 Billion in transaction value, Lind’s funds have been flexible and supportive capital partners to investee companies since 2011.

www.thelindpartners.com

Caution regarding forward-looking information:

This press release contains statements which constitute “forward-looking information” within the meaning of applicable securities laws, including statements regarding the plans, intentions, beliefs and current expectations of the Company with respect to future business activities and operating performance. Forward-looking information is often identified by the words “may”, “would”, “could”, “should”, “will”, “intend”, “plan”, “anticipate”, “believe”, “estimate”, “expect” or similar expressions and includes information regarding the Company’s proposed use of proceeds, the ability of the Company to secure any portion of the Loan Amount, the ability of the Company to obtain final approval of the TSX, the timing for closing the first tranche of funding and the funding timeline.

Investors are cautioned that forward-looking information is not based on historical facts but instead reflect management’s expectations, estimates or projections concerning future results or events based on the opinions, assumptions and estimates of management considered reasonable at the date the statements are made. Although the Company believes that the expectations reflected in such forward-looking information are reasonable, such information involves risks and uncertainties, and undue reliance should not be placed on such information, as unknown or unpredictable factors could have material adverse effects on future results, performance or achievements of the Company. This forward-looking information may be affected by risks and uncertainties in the combined business of the Company and market conditions, including (1) a significant change in market price; (2) there being no significant disruptions affecting the Company’s operations whether due to extreme weather events and other or related natural disasters, labor disruptions, supply disruptions, power disruptions, damage to equipment or otherwise; (3) permitting, development, operations and production for the Rovina Valley Project being consistent with the Company’s expectations; (4) political and legal developments in Romania being consistent with current expectations; (5) certain price assumptions for gold and copper; (6) prices for diesel, electricity and other key supplies being approximately consistent with current levels; (7) the accuracy of the Company’s mineral reserve and mineral resource estimates; and (8) labor and materials costs increasing on a basis consistent with the Company’s current expectations. This information is qualified in its entirety by cautionary statements and risk factor disclosure contained in filings made by the Company with the Canadian securities regulators, including the Company’s annual information form, financial statements and related MD&A for the financial year ended December 31, 2020 filed with the securities regulatory authorities in certain provinces of Canada and available at www.sedar.com.

Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking information prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. Although the Company has attempted to identify important risks, uncertainties and factors which could cause actual results to differ materially, there may be others that cause results not to be as anticipated, estimated or intended. The Company does not intend, and do not assume any obligation, to update this forward-looking information except as otherwise required by applicable law.

The TSX does not accept responsibility for the adequacy or accuracy of this news release. 

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