Pacific Imperial Mines options Fenton property, British Columbia

Pacific Imperial Mines Inc. [TSXV: PPM] reported that it has entered into an option agreement dated January 26, 2026 whereby Hudbay Minerals Inc. [TSX, NYSE: HBM] granted the company the option to acquire a 100% interest in the Fenton property in British Columbia.

The road accessible property is 30 km south of Houston, British Columbia. The approximately 1,700-hectare property is extensively covered by glacial till and is accessible by a network of logging roads. Past exploration includes geochemistry, airborne and ground geophysics and limited drilling.

Mineralization on the property is an epithermal, high to low sulphidation, precious metal system hosted within felsic volcanic rocks of the Kasalka Formation. The age, mineralization and alteration characteristics of the property are similar to those of Artemis’ Blackwater deposit, which lies to the southeast along a Southeast-Northwest regional trend which hosts a majority of the gold-silver prospects and deposits in the region. The past producing Equity Silver mine is 40 km east of the property.

The transaction is subject to TSXV approval. Under the option agreement, in order to exercise the option, the company must complete the following earn-in requirements by the sixth anniversary of the date that the Exchange provides approval for the transactions contemplated by the option agreement: incur C$5,250,000 in exploration expenditures in staged amounts for each anniversary ending on the sixth anniversary date; make a one-time initial cash payment to Hudbay in the amount of C$25,000 within 180 days following the date that the Company receives Exchange approval for the Option Agreement; and make cash payments to Hudbay in the aggregate amount of C$2,175,000, or, alternatively, issue to Hudbay an equivalent number of common shares of the company in staged amounts for each anniversary ending on the sixth anniversary date and based on the applicable market price for such shares, as further described below.

The company may elect to accelerate any of the earn-in requirements under the option agreement at its discretion.

Any share issuance to Hudbay under the option agreement will have an issue price per share equal to the volume weighted average trading price of the shares on the Exchange during the 10 trading days ending on the third trading date preceding the date any shares are issued under the agreement, subject to a minimum issue price of C$0.05 per Share.

If any share issuance to Hudbay under the Option Agreement would result in Hudbay holding greater than 9.99% of the shares, the company must settle the applicable payment in cash instead of shares. The shares issuable under the option agreement will be subject to a hold period ending four months and one day after the date of issuance in accordance with applicable securities laws and the policies of the Exchange.

Upon the exercise of the option, the company will acquire a 100% interest in the property and Hudbay will be granted a 1.25% Net Smelter Returns royalty on the property. Within 10 days following the company’s receipt of all required governmental permits to construct and operate a mine on the property after exercise of the option, the company will make a one-time cash payment of C$5,000,000 to Hudbay, which payment will constitute an advance payment of the Hudbay NSR. In addition, following the exercise of the option and within 10 days after the company publicly announces the start of commercial production on the property, the company will make an additional one-time cash payment of C$10,000,000 to Hudbay, which payment will also constitute an advance payment of the Hudbay NSR. The company has also granted Hudbay a right of first refusal in respect of the sale of any future metals or ore production from the property.

In addition to any Hudbay NSR that may be granted on the property following the exercise of the option by the company, the property is currently subject to a 2% Net Smelter Returns royalty (the underlying NSR) payable to a third party after start of commercial production, which underlying NSR would be assumed by the company if the option is exercised. The company will have the right to purchase 50% of the underlying NSR (i.e., a 1% Net Smelter Returns royalty) for a cash payment of C$700,000.

Pacific Imperial’s current focus is on the Brownell property in Saskatchewan and the Babine property in B.C.