New Earth enters option deal to buy Red Wine project

Executive Summary

• New Earth Resources Corp. has executed an option agreement with Northex Capital Partners Inc. to acquire the Red Wine rare earth project in Labrador, Canada.
• The project consists of two non-contiguous mineral claims totaling approximately 1,575 hectares in the Central Mineral Belt of Newfoundland and Labrador.
• Acquisition consideration involves the issuance of 4.5 million Class A common shares and a 2.0% net smelter returns royalty.

Key Details

• Target Asset: Red Wine rare earth project, comprising two non-contiguous claims totaling ~1,575 hectares.
• Location: Central Mineral Belt (CMB) of Newfoundland and Labrador, Canada.
  • Primary claim: ~1,425 hectares, located ~110 km northeast of Churchill Falls and ~20 km east of the Orma Lake hydro access road.
  • Secondary claim: ~150 hectares, located ~9 km northeast of the primary claim.
• Counterparty: Northex Capital Partners Inc. (arm's length).
• Consideration Structure:
  • Equity: Aggregate of 4.5 million Class A common shares issued in tranches:
    • 1.25 million shares within 10 business days of execution.
    • 1.5 million shares on or before the first anniversary of the agreement.
    • 1.75 million shares on or before the second anniversary of the agreement.
  • Royalty: 2.0% net smelter returns royalty granted to Northex.
• Share Restrictions: All shares issued are subject to a four-month hold period per applicable securities laws.

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