LOI with Agnico Eagle

Letter of Intent to Consolidate the Barsele Project

You can read the press release detailing the LOI with Agnico Eagle here.

Deal Terms

• Non-binding LOI to acquire Agnico Eagle’s 55% interest
• Barsele currently holds the remaining 45% of the Barsele Project.
• Completion will consolidate the project for 100% ownership by Barsele
• Term highlights:
  • Cash payment of $US45M
    • a portion can be vendor take-back note
  • Issuance of 14.9% of common shares on closing of the proposed transaction
  • Issuance warrants exercisable into 6,000,000 shares
    • five-year term at the higher of: C$1.25, or 20% premium to 20-day VWAP prior to closing, or if Barsele issues convertible debt with the Cash Amount, the conversion price of such convertible debt
  • 2% project-wide NSR
    • Barsele can purchase 1% for $15M
  • Contingent value right on future gold mineral reserves and mineral resources at the Barsele Project
    • Barsele to pay 2.5M for every new 1Moz Au discovered on the project for to a maximum of $US 20M for up to 20 years
    • Payable in the earlier of: 10 years, or change of control, or production decision made on the project

What does 100% ownership mean?

• Continue to explore the property with the highly skilled Team.
• Plans to drill a minimum of 30,000 metres in the first 1.0 to 1.5 years.
  • Drill bit emphasis near term will be to grow the gold resource.
• Working toward an additional 1.0 million NI 43-101 compliant ounces.
• Creation of a near term inventory of 3.5 million gold ounces.

Near Term Plans

• Maintain high standards of Health, Safety and Environment.
  • Covid-19 planning.
• Exploration planning with the Sámi and other affected peoples.
  • Maintain positive relations with Mining Inspectorate and other Governments.
  • Maintain all QA/QC protocols.
• Maintain all ongoing environment related surveys, water testing et al.
  • Add continuity to the high-grade drill results at the Avan Zone.
  • Additional drill testing at the recently discovered Bastuträsk.
  • Plans for drill testing the most compelling VMS targets.
  • Continue with Base of Till drilling, geophysics, MEFFA/XRF sampling.

Long Term Plans

• Advance Barsele to the point where a significant and reputable miner acquires the project with plans to develop it.
  • Increased resource will provide value for shareholders and attractiveness to majors.
    • Agnico Eagle will remain supportive as the largest shareholders at 14.9%