Western Star signs option for Rowland tungsten project

Executive Summary

• Western Star Resources Inc. has entered into an agreement to acquire an option to acquire the past-producing Rowland tungsten project in Nevada’s Jarbidge mining district.
• The transaction involves total upfront consideration of $60,000 and 1 million common shares, plus significant deferred milestone payments based on exploration success and resource definition.
• The acquisition aligns with U.S. government priorities for domestic critical mineral supply chains, specifically tungsten, which is currently imported heavily from China.

Key Details

• Asset: The Rowland project, a past-producing tungsten mine located in the Jarbidge mining district, Nevada, approximately six miles southwest of Jarbidge.
• Historical Production:
  • 1943: Shipped 4.5 tons of ore containing 3.38% WO3.
  • 1954–1956: Produced approximately 1,000 tons of ore containing 0.5% to 1.0% WO.
• Geology: Limestones, shales, and quartzites intruded by quartz monzonite stock; extensive metamorphism to skarn and hornfels; scheelite occurs as coarse crystals and is disseminated with molybdenite, powellite, pyrite, chalcopyrite, and limonite.
• Upfront Consideration:
  • Total: $60,000 USD and 1,000,000 common shares.
  • Initial Payment: $20,000 non-refundable, payable within 5 business days of signing.
  • Deferred Payment: $40,000, payable upon receipt of conditional approval by the Canadian Securities Exchange (CSE).
  • Share Issuance: 1,000,000 fully paid and non-assessable common shares upon closing.
• Deferred Milestone Consideration:
  • Milestone 1: Upon increasing claim area by 30%+ and identifying three rock-chip samples >2.0% WO, issue 500,000 shares valued at 10-day VWAP.
  • Milestone 2: Upon completing drilling/trenching intersecting mineralization of at least 10m averaging 0.7% WO, issue 1,000,000 shares valued at 10-day VWAP.
  • Milestone 3: Upon filing a NI 43-101/JORC compliant resource estimate defining ≥5 million tonnes at ≥0.7% WO, pay $500,000 in cash or shares (at company's election).
• Royalties:
  • Vendors retain a 1.5% Net Smelter Return (NSR) royalty.
  • Western Star has the right to buy back 1.0% of the NSR for $1,000,000 at any time.
• Underlying Option Terms:
  • To earn 100% interest, Western Star must make payments to the underlying option holder:
    • $15,000 USD on or before July 1, 2026.
    • $15,000 USD on or before July 1, 2027.
    • $20,000 USD on or before July 1, 2028.
  • Upon completion, a 0.5% production royalty applies.
• Share Restrictions: Consideration shares are subject to a four-month-and-one-day resale restriction from the date of issuance.
• Qualified Person: Derrick Strickland (non-independent) has reviewed and approved the scientific and technical information.

Notable Quotes

• "As I stated previously, securing a domestic source of tungsten is not just a business opportunity; it's a matter of national importance," said Blake Morgan, chief executive officer of Western Star.
• "The in-depth due diligence exceeded expectations of our view that the past-producing Rowland property represents a unique and timely opportunity... We plan to get crews out on the ground as soon as possible to start with geophysics, channels sampling and mapping. The goal with the first phase of exploration is to get the project to a drill-ready stage, ready for its maiden program early next year."