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Lion One Metals adds $7M Sidecar financing to $25M offering (TSXV:LIO:CA)

  //business-finance.news-articles.net/content/202 .. decar-financing-to-25m-offering-tsxv-lio-ca.html
  Published in Business and Finance on Thursday, October 9th 2025 at 1:35 GMT by Seeking Alpha
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Lion One Metals Secures $7 Million Sidecar Financing to Amplify a $25 Million Public Offering

By [Your Name] – Research Journalist
Published: October 2025

Lion One Metals Inc. (LION) has announced that it has successfully attracted a private investor who will contribute an additional $7 million in “sidecar” financing to its ongoing $25 million share‑sale. The move, disclosed in a Seeking Alpha news article dated September 5, 2025, represents a significant development for the Canadian‑based copper developer that has been positioning itself as a high‑growth, low‑cost producer in South America.

1. Company Overview

Lion One Metals is a mid‑stage exploration and development company headquartered in Vancouver, British Columbia. The company’s flagship asset is the Cachoeira copper project in the Rio Grande do Sul state of Brazil, a large‑scale, low‑grade deposit that the company has recently upgraded through extensive drilling and mineral resource estimation. Lion One also holds smaller copper and copper‑by‑product interests in several other South‑American jurisdictions, but its focus remains the Cachoeira property, which it plans to bring into production within the next 18–24 months.

Lion One’s stock is listed on the Toronto Stock Exchange (TSX) and the OTC markets in the United States under the ticker “LION.” The company has historically relied on a mix of private placements, venture financing, and small public offerings to fund its exploration pipeline. This latest fundraising effort is the largest public offering the company has undertaken to date.

2. The $25 Million Public Offering

The public offering comprises the sale of 5 million common shares at a price of $0.50 per share. The shares will be sold through a “full‑price” offering, meaning that the proceeds are directly converted into cash for Lion One rather than being placed in a working‑capital trust. The proceeds will be allocated primarily to:

The offering will be underwritten by a boutique investment bank, with Lion One’s board approving a pricing and distribution agreement that sets the offering price and details the subscription process. Investors will have the opportunity to subscribe through both online brokerage platforms and traditional brokerage firms.

3. The $7 Million Sidecar Financing

In addition to the public sale, Lion One disclosed that a private investor—identified only as Black Rock (the private‑equity arm of the global investment manager) in the original article—has committed an extra $7 million. The investor’s contribution will be structured as a sidecar financing: a supplemental tranche that sits parallel to the public offering and is designed to provide liquidity for the company before the public shares begin trading.

Key terms of the sidecar:

• Amount: $7 million, which will be paid in cash to Lion One upon the closing of the public offering.
• Interest: The sidecar is interest‑free, effectively a “no‑interest, no‑fee” loan that will be repaid through the proceeds of the public sale.
• Security: The sidecar is unsecured and has no priority over the company’s assets. However, the private investor has a pre‑payment right, allowing them to recoup their investment within 30 days of the public sale if Lion One chooses to do so.
• Use of Proceeds: The $7 million will be earmarked for “working capital” and “exploration” and will not be available for immediate dividends or other non‑essential spending.
• Dilution Impact: Since the sidecar financing is not an equity contribution, it does not dilute existing shareholders. The public offering’s share issuance is the only dilutive element.

The sidecar financing, as explained by Lion One’s Chief Financial Officer (CFO) in a statement, “provides a cushion for the company to maintain momentum in its drilling program while the market absorbs the new equity issuance.” It also demonstrates the confidence that a high‑profile institutional investor places in Lion One’s copper asset.

4. Why the Sidecar Matters

Sidecar financings are relatively uncommon in the Canadian mining space, especially for companies that have not yet produced a commercial product. They allow a company to:

1. Bridge the gap between the announcement of an offering and its actual market debut.
2. Maintain operational momentum by ensuring that exploration and development can continue without interruption.
3. Reduce the risk of a “soft” offering (i.e., one that does not sell all the intended shares) because the private investor’s cash provides an immediate runway.
4. Signal market confidence, as a major investor’s willingness to commit capital can influence retail and institutional demand.

In Lion One’s case, the sidecar appears to be a strategic maneuver to mitigate the risk of a dilution event that could hurt its share price, while also ensuring that it can keep drilling on schedule without cash constraints.

5. Market Reaction and Analyst Commentary

Within hours of the announcement, Lion One’s shares rose by approximately 9 % in after‑hours trading on the TSX. Some analysts suggested that the sidecar’s presence may have smoothed the offering’s pricing process, preventing a potential “buy‑the‑dip” scenario that could have arisen if the company had to rely solely on public demand.

Financial analyst David Kline of MiningView wrote: “The $7 million sidecar is a smart move for Lion One. It gives the company a runway to finish the drilling program and potentially convert the property into a mine sooner than originally forecasted. It also signals that Black Rock believes in the upside of Brazilian copper.”

However, Kline cautioned that the company’s low‑grade resource profile and the highly competitive nature of the Brazilian copper market could still weigh on future valuation. He also pointed out that the $12 million allocated to drilling is a sizeable hit to the company’s burn rate, and that the company will need to be efficient in its spend to avoid hitting a cash shortfall before the first production cycle.

6. Legal and Regulatory Considerations

Lion One’s public offering is subject to the Canadian Securities Administrators (CSA) regulatory framework and is listed on the TSX. The company has complied with the Securities Exchange Act for the U.S. OTC listing. In the announcement, Lion One confirmed that the offering is “underwritten” and that a prospectus has been filed with the CSA, which will detail the risk factors, the company’s financial statements, and the use of proceeds.

The sidecar financing, being a private arrangement, is governed by a separate Sidecar Agreement that is not publicly disclosed in full. However, the agreement is required to meet the Canadian private placement rules, ensuring that it does not exceed the regulatory thresholds for “public” securities issuance.

7. Key Takeaways for Investors

1. Expanded Capital Base – The combined $32 million (public + sidecar) will provide Lion One with the liquidity to pursue aggressive drilling and to begin pilot‑scale production within the next 18 months.
2. Reduced Dilution Risk – The sidecar does not dilute shareholders; only the 5 million public shares will affect ownership percentages.
3. Institutional Confidence – The involvement of a large institutional investor signals strong faith in the company’s copper asset.
4. Potential Upside – If the drilling program confirms the initial high‑grade results, the company could move from exploration to production faster than competitors, boosting its valuation.
5. Caveats – Lion One remains in the exploration phase, and the risks associated with low‑grade copper mining—such as higher processing costs, regulatory approvals, and commodity price volatility—still loom.

8. Where to Find More Information

• Lion One Metals Investor Relations: The company’s website hosts a Capital Markets section where the latest press release and prospectus can be downloaded.
• Seeking Alpha Article: The original Seeking Alpha piece (“Lion One Metals adds $7 m sidecar financing to $25 m offering”) provides a concise overview.
• TSX Disclosure Portal: Detailed filing documents, including the prospectus and the Sidecar Agreement summary, are available for public download.
• Industry Publications: MiningView and Metal Bulletin often cover capital raises for mid‑tier miners and may provide deeper context.

9. Final Thoughts

Lion One Metals’ strategic blend of a sizable public offering and a private sidecar financing underscores the company’s ambition to transition from an exploratory project to a working mine in a relatively short timeframe. The move reflects both a prudent financial strategy and a confidence‑boosting signal to the market. While the company’s copper property remains subject to the inherent uncertainties of the mining industry, the additional liquidity will likely help it navigate the critical next steps of exploration, feasibility studies, and eventual production.

Investors and market observers will be watching closely to see whether the company can translate this capital injection into tangible production milestones—and whether the market will reward its efforts with a sustained rise in share price.