Honey Badger Silver to Acquire Important High-Grade Permitted[1] Canadian Silver Project; Launches $10 Million Financing

Honey Badger Silver Inc. (TSXV:TUF) has announced a significant strategic move by entering into a definitive agreement to acquire Canadian Zinc Corporation (CZC), which owns the Prairie Creek Project, a high-grade silver-zinc-lead asset located in the Northwest Territories. The acquisition, valued at C$12 million, comprises a cash payment of C$10 million and an additional C$2 million in shares and warrants. This transaction is poised to enhance Honey Badger's portfolio, particularly as the company shifts its focus towards silver, with the project now being evaluated under the current high silver price environment, which exceeds C$100 per ounce. The Prairie Creek Project has already received all necessary regulatory approvals, and its historical resource estimates indicate substantial potential, with 9.8 million tonnes of measured and indicated resources grading 139 g/t silver, alongside significant zinc and lead credits.

The acquisition is strategically timed, as it consolidates Honey Badger's position in the silver market, which is increasingly viewed as a critical mineral in North America. The Prairie Creek Project is not only advanced in terms of permitting but also benefits from existing infrastructure, including a developed underground mine and mill facilities. This infrastructure significantly reduces the development risk typically associated with greenfield projects. The transaction is expected to close in the second quarter of 2026, subject to customary conditions, including the receipt of TSXV acceptance. The company has also initiated a brokered private placement to raise up to C$10 million through the issuance of subscription receipts, priced at C$0.16 each, which will help fund the acquisition.

From a financial perspective, the transaction appears to be well-structured. Honey Badger's cash position post-acquisition is expected to be bolstered by the funds raised from the private placement, which will mitigate immediate dilution risks. The environmental bond of approximately C$5.7 million associated with the Prairie Creek Project will remain in place, ensuring that past environmental disturbances are addressed. Furthermore, the acquisition is designed to be cash-free and debt-free, meaning that Honey Badger will not inherit any liabilities from CZC, thereby enhancing the overall value proposition of the deal.

In terms of valuation, Honey Badger's acquisition of the Prairie Creek Project can be assessed against its peers in the silver sector. Notably, companies such as SilverCrest Metals Inc. (TSX:SIL), First Majestic Silver Corp. (TSX:FR), and Pan American Silver Corp. (TSX:PAAS) provide a useful benchmark. SilverCrest, for instance, has a market capitalisation of approximately CAD 1.5 billion and reported an EV/EBITDA multiple of around 20x, while First Majestic trades at an EV/EBITDA multiple of approximately 15x. Given that Honey Badger is acquiring a project with significant historical resources and existing infrastructure, the valuation metrics suggest that the acquisition could be accretive, particularly if silver prices continue to remain robust.

The funding strategy, which includes the private placement, is crucial for ensuring that Honey Badger can finance the acquisition without over-leveraging itself. The company’s current cash burn rate, while not explicitly disclosed, is expected to be manageable given the anticipated inflow from the financing. The successful completion of the financing will provide Honey Badger with a runway to advance the Prairie Creek Project while also allowing for potential exploration and development activities on its other silver assets.

However, the announcement does not come without risks. One significant concern is the reliance on the historical resource estimates, which have not been verified as current mineral resources under NI 43-101 standards. The company acknowledges that significant work, including re-drilling and data verification, will be required to classify these estimates as current resources. This introduces a level of uncertainty regarding the actual resource potential of the Prairie Creek Project, which could impact future valuations and operational plans.

Looking ahead, the next measurable catalyst for Honey Badger will be the closing of the acquisition, expected in Q2 2026, alongside the completion of the private placement financing. Successful execution of these steps will be critical for maintaining investor confidence and advancing the company's strategic objectives. The integration of the Prairie Creek Project into Honey Badger's portfolio will also be closely watched, particularly in terms of how the company plans to leverage the existing infrastructure and regulatory approvals to expedite development.

In conclusion, the acquisition of the Prairie Creek Project represents a significant strategic move for Honey Badger Silver, positioning the company to capitalize on the growing demand for silver. The transaction is expected to enhance the company's asset base and operational capabilities, while the financing strategy appears to mitigate immediate dilution risks. However, the reliance on historical resource estimates and the need for further validation introduces a degree of uncertainty. Overall, this announcement can be classified as significant, given its potential to transform Honey Badger's operational focus and market positioning in the silver sector.

Key insights

• ●Acquisition valued at C$12 million enhances silver focus.
• ●Private placement aims to raise C$10 million for financing.
• ●Historical resource estimates require verification for current classification.

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