Origen firms up deal to acquire two projects in Brazil

Executive Summary

• Origen Resources Inc. signed a definitive agreement to acquire a 90% interest in two rare-earth element (REE) project areas in Piaui state, Brazil, increasing its land position to over 35,540 hectares.
• The company concurrently closed a $500,000 non-brokered private placement of 10 million units at $0.05 per unit to fund the acquisition and exploration.
• The transaction includes significant earn-in obligations, requiring $1 million in exploration expenditures within two years, after which the vendor receives additional equity and a board seat.

Key Details

• Land Acquisition Terms:
  • Origen acquires a 90% interest in two REE project areas in Piaui state, Brazil.
  • Initial consideration: $50,000 USD cash and issuance of 2,000,000 shares to the vendor (Weberte Giovan de Almeida and Associates).
  • Earn-in obligation: Origen must incur $1,000,000 in exploration expenditures within two years of completing CSE filing requirements.
  • Post-earn-in consideration: Upon completion of the earn-in, Origen issues shares equal to 15% of outstanding shares (including the initial 2 million shares) and grants the vendor a seat on the board of directors.
  • Right of First Refusal: Granted over five additional project areas totaling approximately 9,903 hectares.
  • Hold Period: All shares issued to the vendor have a hold period of four months and one day.
• Financing Details:
  • Gross Proceeds: $500,000 USD.
  • Structure: Non-brokered private placement of 10,000,000 units.
  • Price: $0.05 per unit.
  • Warrants: Each unit includes one-half share purchase warrant. Each whole warrant is exercisable for 18 months at an exercise price of $0.075 per common share.
  • Hold Period: All securities issued under the financing have a hold period of four months and one day from closing.
• Technical & Operational Updates:
  • Land Position: Increased by staking 21,650 adjacent hectares, bringing total control to 35,540 hectares.
  • Due Diligence: Fieldwork conducted over three days on the two licensed areas; 23 rock samples and 16 soil samples collected at 31 stations.
  • Analytical Results: Portable XRF, ICP-OES/MS, and radiometric spectrometer analysis confirmed previous results from the vendor and the Brazilian Geological Survey (SGB).
  • Geology: Mineralization confirmed in specific phosphate nodule-bearing beds and phosphatic sandstone beds.
  • Technical Advisor: Coast Mountain Geological Ltd. retained for technical and project management services. Note: Coast Mountain holds 2.9% of Origen shares, and one director owns 60% of Coast Mountain. John Harrop, PGeo, is the Qualified Person (QP) but is not independent of the company.

Notable Quotes

• "Based on our initial observations, this project has all the ingredients to turn into something significant and launch this region of Brazil into the REE spotlight. We are excited by the level of confidence and enthusiasm that the field due diligence program has generated, and we will be moving forward to exploit first-mover advantage and solidify a basin-scale land position," states Gary Schellenberg, chief executive officer.