Mr. Martin Kostuik reports

BATTERY MINERAL RESOURCES ANNOUNCES PROPOSED CAPITAL REORGANIZATION, INCLUDING A PROPOSED OFFERING OF UP TO US$6,000,000 IN UNSECURED CONVERTIBLE DEBENTURES AND PROPOSED CONSOLIDATION OF EXISTING DEBT

Battery Mineral Resources Corp. has arranged a private placement offering of senior unsecured convertible debentures for total gross proceeds of up to $6-million (U.S.) (approximately $8.2-million (Canadian)). The proceeds from the debentures will be applied toward working capital and the restart of copper concentrate production at its Punitaqui copper project in Chile.

The company continues to progress toward securing the balance of the capital required for the restart and anticipates sharing further updates in that respect in the fourth quarter of 2023. The company estimates the total capital required for the restart to be approximately $13-million (U.S.) (approximately $17.8-million (Canadian)) (prior to corporate costs and other asset holding costs and inclusive of amounts to be raised in the private placement).

In connection with the private placement, the company is also proposing to issue up to $15.4-million (U.S.) (approximately $21.0-million (Canadian)) in debentures to its existing debtholders to refinance substantially all of the company's outstanding indebtedness.

Debenture offering

The debentures will mature on Sept. 30, 2026, and will bear interest at 10 per cent per annum, compounding annually on Sept. 30 of each year, not in advance. Interest accrued from the date of issuance and up to and including March 30, 2025, will be paid by way of issuance of common shares of the company. Interest accrued following March 30, 2025, will be, at the option of the holder, paid either in cash or by way of issuance of common shares of the company. The issuance of common shares as payment of interest will be at the then current market price of the company's common shares at the date the interest becomes payable and will be subject to the prior acceptance of the TSX Venture Exchange and applicable securities laws.

Holders of debentures may, at their option, at any time from March 31, 2024, and prior to the close of business on the business day immediately preceding the maturity date, convert all, but not less than all, of the principal amount of such debentures into common shares of the company at the conversion price of 22 U.S. cents per share (approximately 30 Canadian cents per share).

Weston Energy II LLC, a portfolio company of Yorktown Partners LLC and an existing shareholder of the company, has committed to purchase $3.0-million (U.S.) (approximately $4.1-million (Canadian)) in principal amount of debentures.

The debenture financing is anticipated to close in two or more tranches, with the first closing anticipated to occur on or about Oct. 19, 2023.

Debt consolidation

The company is also proposing to issue up to $15.4-million (U.S.) (approximately $21.0-million (Canadian)) in debentures to holders of existing indebtedness as part of a comprehensive debt consolidation that will simplify the company's capital structure and extend its near-term debt maturities.

Weston Energy LLC, also an existing shareholder of the company, and Weston Energy II have agreed to exchange all their outstanding debt in the company into debentures. This includes $7.4-million (U.S.) (approximately $10.1-million (Canadian)) of existing convertible debentures held by Weston Energy LLC, a secured bridge loan of $5.5-million (U.S.) (approximately $7.6-million (Canadian)) (originally announced on Oct. 21, 2022) held by Weston Energy LLC and an unsecured promissory note of $1.9-million (U.S.) (approximately $2.6-million (Canadian)) (originally announced on July 5, 2023) held by Weston Energy II, for a total of $14.9-million (U.S.) (approximately $20.3-million (Canadian)) that Weston Energy LLC and Weston Energy II have agreed to exchange into the debentures.

In addition, all additional holders of the company's currently outstanding existing debentures will be offered the opportunity to exchange their existing debentures into the debentures, which total $600,000 (U.S.) (approximately $800,000 (Canadian)) in principal and accrued and unpaid interest outstanding. The debentures issuable will be on the same terms.

The debt consolidation and the completion of the private placement are expected to benefit Battery Mineral's balance sheet through an enlarged capital base, an extended term to maturity of the company's deb and the accrual of interest during the anticipated period of ramp-up of copper-silver production at Punitaqui and through a conversion option that, if exercised by the debentureholders, would significantly reduce the company's financial leverage.

The debt refinancing and the issuance of the debentures are subject to final approval by the TSX Venture Exchange.

Chief executive officer commentary

Martin Kostuik, Battery Mineral's chief executive officer, stated: "We are very pleased to announce this funding, which, together with anticipated additional non-dilutive project funding that the company is working towards closing in the fourth quarter of 2023, is expected to fund the restart of production at the Punitaqui project. Finally, we are pleased to have affirmation of the soundness and importance of our pathway to creating value as demonstrated by the continued support of Yorktown Partners."

Exchange rates

All U.S.-dollar amounts for which Canadian-dollar equivalent amounts are given in this news release were calculated at a Canadian-dollar/U.S.-dollar exchange rate of 1.3661, the exchange rate published by the Bank of Canada on Oct. 13, 2023.

Multilateral Instrument 61-101 matters

Weston Energy LLC and Weston Energy II are related parties to Battery Mineral pursuant to Multilateral Instrument 61-101 (Protection of Minority Security Holders in Special Transactions). Prior to giving effect to the transactions disclosed in this news release, Weston Energy LLC owns or controls 96,378,340 Battery Mineral common shares (directly or indirectly), and Weston Energy II owns or controls (directly or indirectly) seven million Battery Mineral common shares, and Yorktown Energy Partners IV LP owns or controls 4.2 million Battery Mineral common shares (directly or indirectly). On a combined undiluted basis, these entities hold 107,528,340 common shares and 122,491,305 common shares assuming the conversion of all existing debentures (representing approximately 60.60 per cent and 63.31 per cent, respectively, of the outstanding Battery Mineral common shares).

The refinancing of the various Weston Energy LLC and Weston Energy II loans through the issuance of debentures will constitute a related-party transaction for the purposes of MI 61-101. The refinancing is exempt from the formal valuation requirements of MI 61-101 as Battery Mineral is not listed on a specified market that would require compliance with such formal valuation requirements (as set forth in Section 5.5(b) of MI 61-101) and is further exempt from the minority shareholder approval requirements of MI 61-101 by virtue of Section 5.7(e) of MI 61-101, which provides that a related-party transaction is exempt from the minority shareholder approval requirements if the issuer is in serious financial difficulty, the transaction is designed to improve the financial position of the company (among other criteria), and there is no other requirement to hold a meeting of shareholders to approve the transaction.

As part of its deliberations in respect of the proposed refinancing, the board of directors of Battery Mineral, including a special committee composed of independent directors, considered the financial position of Battery Mineral and the objectives of the proposed refinancing transactions, and the criteria and conditions with respect to the financial hardship exemptions described above, including the fact that there is no requirement, corporate or otherwise, to hold a meeting to obtain any approval of the holders of Battery Mineral common shares for such transactions.

About Battery Mineral Resources Corp.

Battery Mineral is a battery mineral company, providing shareholders exposure to the global megatrend of electrification while being focused on growth through cash flow, exploration and acquisitions in favourable mining jurisdictions. Battery Mineral's mission is the discovery, acquisition and development of battery metals (namely cobalt, lithium, graphite and copper) in North America, South America and South Korea and to become a premier and responsible supplier of battery minerals to the electrification marketplace. Battery Mineral is currently pursuing a near-term resumption of operations of the Punitaqui mining complex, a past copper-gold-silver producer, in the Coquimbo region of Chile. Battery Mineral is the largest mineral claim holder in the historic Gowganda cobalt-silver camp in Ontario, Canada, and continues to pursue a focused program to build on the recently announced, one-million-pound high-grade cobalt resource at McAra. In addition, Battery Mineral owns 100 per cent of ESI Energy Services Inc. (including ESI's wholly owned U.S. operating subsidiary Ozzie's Inc.), a profitable mainline pipeline and renewable energy equipment rental and sales company with operations in Alberta, Canada, and Arizona, United States. Battery Mineral is based in Canada, and its shares are listed on the TSX Venture Exchange under the symbol BMR and on the OTCQB under the symbol BTRMF.

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