Great Atlantic options Pilley's Island to HM

Executive Summary

• Great Atlantic Resources Corp. entered into an option agreement with HM Exploration Corp. that could transfer a 100 % interest in the Pilley’s Island copper project to HM Exploration in exchange for up to 6.3 million Great Atlantic shares and $3.5 M of exploration spending by HM Exploration.
• Upon completion, Great Atlantic will retain a 1 % net smelter royalty on the project and may receive additional bonus payments tied to future sale proceeds or the achievement of a ≥ $1 B NPV feasibility study.
• The agreement includes detailed share‑issuance tranches, milestone‑based exploration spend requirements (including $2.1 M by 9/15/2028), and contingent cash bonuses up to $5 M for resource expansion.

Key Details

• Option Structure: HM Exploration may acquire a 100 % interest in the Pilley’s Island project through:
• Issuance of up to 6,300,000 Great Atlantic common shares at a deemed price of $0.19 per share.
  • 700,000 shares issued within 10 business days after CSE approval.
  • Remaining 5,600,000 shares delivered in five annual tranches (1.05 M × 4 + 1.40 M final tranche).
• Exploration Commitment: HM Exploration will spend a total of $3.5 M on exploration before 15 Sept 2030, with at least $2.1 M spent by 15 Sept 2028.
• Royalty Retention: After the option is exercised and all conditions met, Great Atlantic retains a 1 % net smelter royalty (NSR) on any production from Pilley’s Island.
• Bonus – Sale Proceeds: If an arm‑length sale of the project occurs during the option period:
• An additional consideration equal to 5 % of total cash and non‑cash proceeds is payable to the original vendor and the optionor (Great Atlantic).
• Distribution of this bonus: 70 % to the optionor, 30 % to the original vendor.
• Bonus – Resource Development: Upon achievement of a cumulative mineral reserve/resource with a feasibility study NPV ≥ $1 billion, Great Atlantic will pay $5 M in cash (split pro‑rata) to the optionor and original vendor within 30 business days of filing the technical report.
• Project Overview: Pilley’s Island lies in Notre Dame Bay, Newfoundland; covers 12.25 km² across eight mineral licences; hosts historic VMS occurrences with Zn, Pb, Cu, Ag, Au. Notable historic drill/trench results (2017) include:
• 15.40 % Zn, 6.60 % Pb, 4.66 % Cu, 111.5 g/t Ag over 1.05 m.
• 17.30 % Zn, 0.10 % Pb, 2.97 % Cu, 31.2 g/t Ag over 0.70 m.
• Grab samples up to 40.8 % Zn, 20.0 % Pb, 8.36 % Cu, 148.1 g/t Ag, 2.28 g/t Au.
• Recent Exploration (2024): Semi‑massive to massive sulphide mineralization in the Fragmental zone yielded up to 1.32 g/t Au, 4.36 % Zn, 0.61 % Pb, and 6,499 ppm Cu.
• Qualified Person: David Martin, P.Geo., VP Exploration (Great Atlantic), has approved the technical information in this release.

Notable Quotes

“This initial deal highlights the strength and quality of the many projects we have carefully acquired… Looking ahead, we anticipate additional transactions in the pipeline, particularly relating to our tungsten assets and our exciting emerald discovery.” – Christopher Anderson, CEO, Great Atlantic Resources Corp.