Mr. Brian Kynoch reports

IMPERIAL ANNOUNCES $45 MILLION NON-BROKERED PRIVATE PLACEMENT OF CONVERTIBLE DEBENTURES

Imperial Metals Corp. intends to secure additional financing for the restart of the Mount Polley mine by way of a non-brokered private placement of $45-million aggregate principal amount of convertible debentures.

The Mount Polley mine is currently operating at targeted production rates. However, the restart took longer than planned due to difficulties in hiring operating personnel, supply chain challenges, and unanticipated electrical and mechanical work. This, together with lower copper prices, caused a shortfall in revenues compared with budget. In addition, the rights offering was not fully subscribed, resulting in a shortfall in budgeted equity financing. Due to these reasons, the company now seeks additional financing by way of a convertible debenture financing.

In the week following the repair of a key electrical component on July 27, the concentrator produced concentrate containing approximately 336,000 pounds of copper and 550 ounces of gold against the budget for the initial week following start-up of 188,403 pounds of copper and 495 ounces of gold.

The convertible debentures will have a five-year term ending Aug. 31, 2027. Each $3.20 of the principal amount will be convertible into one common share of the company. The convertible debentures are not callable unless the closing price of the company's common shares exceeds 140 per cent of the conversion price for at least 30 consecutive days. Interest at 8 per cent per annum will be payable semi-annually in cash with the first payment due on Feb. 28, 2023.

The conversion premium on the common share price under the convertible debenture is approximately 13.89 per cent of the volume-weighted average trading price of the common shares on the Toronto Stock Exchange for the five-day period ending on Aug. 5, 2022. Up to 14,062,500 common shares are expected to be issued if all the convertible debentures issuable were converted into common shares of the company, subject to definitive terms and conditions and required approvals from the TSX. N. Murray Edwards, the largest shareholder of the company, has advised that he intends to purchase between $30-million and $35-million of the convertible debentures.

The issuance of the convertible debentures involves certain related parties (as such term is defined under Multilateral Instrument 61-101 (Protection of Minority Security Holders in Special Transactions)), including Mr. Edwards, which constitutes related-party transactions under MI 61-101. These transactions are exempt from the formal valuation requirement of Section 5.4 of MI 61-101 and the minority approval requirement of Section 5.6 of MI 61-101 as neither the fair market value of the convertible debentures issued to related parties, nor the consideration for such convertible debentures exceeds 25 per cent of the company's market capitalization.

About Imperial Metals Corp.

Imperial Metals is a Vancouver-based exploration, mine development and operating company with holdings that include the Mount Polley mine (100 per cent), the Huckleberry mine (100 per cent) and the Red Chris mine (30 per cent). Imperial Metals also holds a portfolio of 23 greenfield exploration properties in British Columbia.

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