Churchill enters LOI to acquire Golden Baie option

Executive Summary

• Churchill Resources Inc. has entered into a binding letter of intent to acquire a 100% undivided interest in the Golden Baie antimony-gold property from Canstar Resources Inc., consolidating it with Churchill's existing Black Raven project in central Newfoundland.
• The acquisition is structured as an exclusive option exercisable over 24 months, contingent on Churchill incurring minimum exploration expenditures and issuing common shares to Canstar.
• The Golden Baie property covers nearly 400 square kilometers, features extensive historic drilling and geophysical data, and is located within 100 kilometers of the Beaver Brook antimony mine.

Key Details

• Transaction Structure:
  • Exclusive option to acquire 100% interest in Golden Baie over 24 months.
  • Expenditure Requirements: Minimum $5 million in exploration expenditures within 24 months, including at least $2 million within the first 12 months.
  • Equity Consideration: Staged issuance of Churchill common shares to Canstar:
    • Initial issuance: 15,834,097 shares (~5.0% of issued/outstanding shares).
    • Subsequent tranches: 1.25% per tranche (max 7.52 million shares per tranche) up to a maximum aggregate holding of 9.99%.
    • Maximum total shares issuable: 45,914,097 shares.
  • Royalties: Upon exercise, Canstar retains a 0.5% Net Smelter Royalty (NSR) (in addition to an existing 2.0% NSR held by Altius Minerals).
  • Cash Payments: Approximately $208,167 for existing cash bonds (reimbursable if option not exercised) and $600,000 in assessment credits due by August 2026.
• Asset Details (Golden Baie):
  • Size: 29 map-staked licences, 1,597 claims, totaling 39,925 hectares (399.25 sq km).
  • Location: Central Newfoundland, within 100 km of the Beaver Brook antimony mine; accessible via highways 360 and 361.
  • Geology: 90 km of strike on a major regional fault structure; same geological package as Beaver Brook and New Found Gold’s Queensway/Kingsway projects.
  • Historic Work:
    • $9 million invested by Canstar since 2020 ($5.5 million in 2022).
    • 15,137 meters of drilling across 152 diamond drill holes.
    • 650 sq km of LiDAR coverage and 1,913 line km of MPASS airborne coverage.
    • 50 documented gold and antimony mineral occurrences.
  • Key Intercepts:
    • 9.6 g/t Au over 7.75 m.
    • 20.6 g/t Au over 3.5 m.
    • 30.6% Sb over 1 m.
    • 74.4% Sb and 32.2% Sb in bedrock at Le Pouvoir and Swangers Cove prospects.
    • High-grade boulders: 197 g/t Au (500 kg boulder) and 289 g/t Au (float rock).
• Strategic Rationale:
  • Consolidates two significant gold-antimony assets in Newfoundland and Labrador.
  • Leverages existing infrastructure, work permits, and overlapping local crews/contractors with the Black Raven project.
  • Aims to secure strategic resource sovereignty for antimony, a critical mineral designated by the Canadian government and G7 allies.
• Regulatory Status: Subject to TSX Venture Exchange approvals and satisfactory completion of due diligence.

Notable Quotes

• Juan Carlos Giron Jr., President and CEO of Canstar Resources: "Churchill stood out by meeting our most stringent criteria: a highly regarded technical team with deep Newfoundland and Labrador experience, a disciplined approach to advancing high-quality projects in the province, and -- critically -- a strategy to deploy meaningful capital on an accelerated, disciplined timeline to unlock the asset's gold and antimony potential."
• Conan McIntyre, CEO of Churchill Resources: "The acquisition of Golden Baie is the logical next step in our mission to secure strategic resource sovereignty through a made-in-Canada antimony supply chain. Building on the momentum of our recent discoveries at Black Raven, this expansion adds critical scale to our portfolio, perfectly balancing high-grade antimony with significant gold upside potential."