Sorrento Resources Updates Strategic Option Agreement with Naughty Ventures to Advance Rare Earth Element Property

Executive Summary

• Sorrento Resources and Naughty Ventures have amended their definitive option agreement for the acquisition of up to 100% of the Bottom Brook rare‑earth element property in Newfoundland and Labrador.
• The revised schedule requires a $1 M cash‑free first tranche, followed by a $250 k cash payment plus share issuances, and a final earn‑out based on a 10% share issuance, with total earned interest reaching 100% upon completion of all milestones.
• Closing is conditioned on Sorrento securing at least $3 M in financing and obtaining required consents; a 10% finder’s fee to Kluane Capital FZCO applies to each cash or share payment.

Key Details

• Option Structure: Up to 100% of Naughty Ventures’ right, title and interest in the Bottom Brook REE property.
• Milestone Schedule:
• Within 12 months of Closing: Minimum $1 M exploration expenditures; no cash payment; issuance of 9 000 000 Sorrento shares (49% earned interest).
• Within 24 months of Closing: Additional $1.5 M expenditures; $250 k cash payment; issuance of 11 000 000 Sorrento shares (31% earned interest).
• Within 36 months of Closing: No further cash or expenditure requirement; issuance of Sorrento shares equal to 10% of outstanding Sorrento shares (final 20% earned interest).
• Final Interest Option: Until the last 10% share issuance is made, Naughty Ventures retains a perpetual 20% free‑carried interest in the property.
• Shareholder Approval Trigger: If any issuance would give Naughty Ventures ≥20% of Sorrento’s outstanding common shares, shareholder approval will be sought.
• Accelerated Exercise: Sorrento may satisfy cash, share and expenditure obligations ahead of schedule to accelerate option exercise.
• Financing Condition: Closing contingent on Sorrento completing a financing of at least $3 M aggregate proceeds.
• Finder’s Fee: 10% of each cash payment and share issuance payable (in cash or shares) to Kluane Capital FZCO.
• Operator Role: Sorrento will act as operator for all work on the Bottom Brook property throughout the option term.

Notable Quotes

(No direct quotes were provided in the release.)