Canstar to acquire three exploration licences in Sweden

Executive Summary

• Canstar Resources Inc. has executed a non-binding letter of intent (LOI) to acquire a 100% interest in three exploration licenses in Sweden's Skellefte VMS district, covering approximately 310 square kilometers.
• The transaction involves issuing 15 million common shares to Lithological Opportunities Ltd. (LithOps), along with cash payments totaling $150,000, subject to a 2.5% NSR royalty.
• This acquisition expands Canstar’s portfolio into a premier European VMS belt, complementing its existing joint venture with VMS Mining Corp. in Newfoundland and its recent binding LOI for the Golden Baie project.

Key Details

• Target Assets: Three exploration licenses in the northern Skellefte district, Sweden, covering ~310 sq km (31,000 hectares) of volcanic belt.
• Strategic Rationale: Entry into one of Europe's premier VMS belts, hosting >150 known deposits and >100 years of production; focuses on high-grade gold and polymetallic systems (Cu, Zn, Pb, Ag, Au).
• Transaction Consideration:
  • Issuance of 15 million common shares to LithOps.
  • $50,000 cash payment upon signing of definitive agreement.
  • $100,000 cash payment 12 months following execution.
• Royalty Terms: Project subject to a 2.5% Net Smelter Return (NSR) royalty. Canstar retains right to repurchase 0.5% for $1 million and a further 0.5% for $2 million, reducing total royalty to 1.5%.
• Technical Leadership: Dr. Rodney Allen (former Boliden chief geologist and VMS expert) will remain actively involved, leveraging his 20+ years of experience in the Skellefte district.
• Exploration Strategy: Phase 1 work includes moraine/till geochemical sampling, reinterpretation of historical geophysical data, and structural/stratigraphic integration to generate drill-testable targets.
• Regulatory Status: Transaction is non-binding, subject to due diligence, definitive documentation, TSX Venture Exchange acceptance, and Swedish regulatory decisions.
• Contextual Updates: CEO notes the transaction complements a recently finalized JV with VMS Mining Corp. (drilling expected at Mary March in summer 2026) and a binding LOI for the Golden Baie project to strengthen the balance sheet.

Notable Quotes

• Juan Carlos Giron Jr., President and CEO: "This transaction sharpens Canstar's identity... Skellefte represents a natural extension of that strategy into one of the most endowed VMS districts in the world."
• Juan Carlos Giron Jr., President and CEO: "Skellefte's northern sector presents a compelling exploration thesis: the right volcanic setting, underexplored ground beneath cover and modern tools capable of seeing what earlier programs could not."