Naughty Ventures, Sorrento amend Bottom Brook option

Executive Summary

• Naughty Ventures Corp. and Sorrento Resources Ltd. have mutually agreed to revise the terms of their definitive option agreement regarding the Bottom Brook rare earth element (REE) property in Newfoundland and Labrador.
• The revision allows Sorrento to acquire up to 100% of Naughty Ventures' interest in the property through a structured earn-in process involving cash payments, share issuances, and exploration expenditures.
• Naughty Ventures retains a 20% free carried interest indefinitely until Sorrento issues shares equal to 10% of its total outstanding shares to earn the final 20% interest.

Key Details

• Transaction Structure: Sorrento holds an option to acquire up to 100% of Naughty Ventures' right, title, and interest in the Bottom Brook REE property.
• Earn-In Mechanism: Sorrento can exercise the option on or prior to the third anniversary of the agreement (Oct 15, 2025) by making cash payments, issuing common shares of Sorrento, and incurring exploration expenditures.
• Carried Interest Terms: Naughty Ventures holds a 20% free carried interest. This interest continues indefinitely unless Sorrento satisfies the final interest option, which requires issuing shares to Naughty Ventures equal to 10% of Sorrento's then-total issued and outstanding shares.
• Operator Role: Sorrento is designated as the operator responsible for all work and activities on the property during the option term.
• Acceleration Clause: Sorrento may accelerate the exercise of the option by completing cash payments, share issuances, and expenditures prior to the expiration date.
• Closing Conditions: Closing is subject to Sorrento completing a financing for minimum aggregate proceeds of $3 million, receiving necessary consents/approvals, and satisfying customary closing conditions.
• Finder’s Fee: Sorrento agreed to pay a finder’s fee to Kluane Capital FZCO equal to 10% of each completed cash payment and Sorrento share issuance due under the option agreement, payable in cash or shares.
• Asset Description: The Bottom Brook property is a rare earth element (REE) property located in Newfoundland and Labrador.

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