Denarius Announces Third Quarter and First Nine Months 2021 Results - Seite 2

In April 2021, the Company added its third project (the “Lomero Project”) with the acquisition of a 100% interest in the Investigation Permit Nº 14,977, also identified as Rubia, covering the areas occupied by the former Lomero-Poyatos Concessions and the mine within them in Southern Spain. The Lomero Project has a historical estimate in the inferred category of 20.93 Mt of 3.08 g/t gold, 62.38 g/t silver, 0.90% copper, 0.85% lead and 3.05% zinc that remains open at depth and along strike. In October 2021, the Company commenced a 23,500 meters drilling campaign at the Lomero Project.

In preparation for the Lomero Project acquisition and the planned exploration program, the Company completed a non-brokered private placement financing in March 2021 of 75,000,000 subscription receipts (the “Subscription Receipts Financing”) at a price of CA$0.45 per subscription receipt for aggregate gross cash proceeds of approximately CA$33.8 million (equivalent to approximately $26.9 million). The Subscription Receipts were converted into common shares and warrants on April 29, 2021. The warrants commenced trading on the TSXV under the symbol “DSLV.WT” in July 2021.

The Company reported a net loss for the third quarter of 2021 of $0.9 million, or $0.00 per share, compared with net loss of $Nil in the third quarter of 2020, principally reflecting general, administrative and marketing expenses incurred in the third quarter of 2021 as the Company ramps up its activities around its exploration projects. For the first nine months of 2021, the net loss amounted to $17.0 million, or $0.12 per share, compared with net loss of $Nil in the first nine months of 2020. The largest items included in the net loss in the first nine months of 2021 were the $12.9 million one-time charge related to the RTO Transaction in February 2021, $2.4 million of share-based compensation expense associated with stock options granted by the Company under its long-term incentive plan to directors, executive officers, management and consultants, and $1.5 million of general, administrative and marketing expenses.

Outlook

The Company is currently carrying out 23,500 m of drilling at the Lomero Project with an estimated cost of $4.0 million. The infill drilling program of 15,600 m has been designed to increase the confidence in the estimates to an Indicated Mineral Resources and to aid in the identification of different mineralization styles. The use of orientated core supplemented with televiewer information will increase the confidence in the structural controls on the project and geotechnical and hydrogeological modelling. The campaign will then proceed to conduct a 50x50 meters in-fill drilling program in the lower levels of the same mine. Initial results from the drilling program are expected toward the end of the year.