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Xplore Resources expands land position at Surge Lithium Project

Jun 11, 2024

Xplore Resources Corp. has entered into an assignment agreement dated May 30, 2024, with Lithium One Metals Inc. ("LONE"), Bounty Gold Corp. ("Bounty"), and Last Resort Resources Ltd. ("Last Resort" together with Bounty, the "Optionors"), whereby LONE has agreed to assign and transfer to Xplore all of its rights, titles, benefits, and interest in, to, and under an option agreement dated December 20, 2022, between LONE and the Optionors (the "Option Agreement"). 

Pursuant to the Assignment Agreement, Xplore will expand its land position along the Root Lake lithium trend with its option to the Root South property (Figure 1) (the "Root South Property"), which is adjacent to Xplore's Surge Lithium Project ("Surge Project") and Green Technology Metals Ltd.'s Root Bay Project - host to a new lithium deposit with a 10 Mt at 1.29% Li2OJORC Resource1. The Root South Property is comprised of 175 claims over 3,570 ha.

The Company also announces it has entered into a property purchase agreement (the "Surge North Agreement") dated June 5, 2024, with an arm's length vendor to acquire 100% right, title and interest in and to mineral property claims located in the Surge Project area (Figure 1) (the "Surge North Property"). The Surge North Property is comprised of 86 claims over 1,800 ha. The Root South Property and Surge North Property expand the Company's Surge Project to approximately 12,480 ha.

Since 2023, the Root lithium area has seen rapid growth following a new lithium discovery at the Root Bay deposit. The deposit now holds a JORC Resource of 10.1 MT at 1.29% Li2O, extending over approximately 1.5 km of the Root Bay trend. The Root South Property is located less than one km south of the Root Bay deposit. 

Recent exploration drilling by Green Technology Metals has revealed a potential new stacked system of pegmatites at Root Bay East, with drill results located 25 to 50 m from the boundary of the Surge Project (Figure 2). The Surge Project lies along the eastern extension of the trend, covering approximately 10 km of prospective geology.

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Figure 1. The Surge Project area showing the new Root South and Surge North property acquisitions, drill targets, nearby deposits and prospects.

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Figure 2. Annotated drone photo taken near Xplore's Surge Project boundary with Green Technology Metals' Root Project (looking east). Annotations show the location of recent drilling by Green Technology Metals with lithium drill results as close as 25 m from the Surge Project boundary.

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Assignment Agreement Terms 

Pursuant to the Option Agreement, the Optionors granted to LONE the exclusive right and option (the "Option") to acquire 100% of the rights, title and interest of the Optionors in and to certain mineral claims located in the Red Lake Mining District, Ontario, subject to a net smelter returns royalty of 2% to the Optionors (payable on commencement of commercial production) (the "Royalty Agreement"). 

To exercise the Option, the Company will need to: 

  • within seven calendar days of the receipt of TSXV approval for the Assignment Agreement, issue to the Optionors an aggregate of 260,000 common shares of the Company (each, an "Xplore Share") and pay to the Optionors an aggregate of $29,000 (of which, $19,000 has already been paid); and

  • on or prior to January 11, 2025, the Company will issue an additional 530,000 Xplore Shares and pay an additional $38,500 in cash to the Optionors.

Subject to the approval of the TSX Venture Exchange (the "TSXV"), the Company will pay an assignment fee of $200,000 to LONE in cash pursuant to the Assignment Agreement. 

In connection with the Assignment Agreement, LONE, the Optionors and the Company have also entered into a royalty assignment agreement (the "Royalty Assignment Agreement"), pursuant to which the Company assumed the Royalty Agreement. Under the Royalty Assignment Agreement, the Company has agreed to assume the obligation to grant a 2% net smelter returns royalty (the "NSR") from activities carried out on the optioned property to the Optionors. The Company may, upon payment to the Optionors of $1,000,000, reduce the royalty payable under the NSR to a 1% net smelter returns royalty. 

Joseph Meagher, the Chief Financial Officer of the Company, is also the Chief Financial Officer of LONE. Other than Mr. Meagher, the Company and LONE do not have any common directors or officers. The Company is arm's length to each of the Optionors. 

The Assignment Agreement and the transactions contemplated therein are subject to the acceptance of the TSXV.

Surge North Property Agreement Terms

Pursuant to the terms of the Surge North Agreement, the Company will purchase 100% of the right, title and interest in and to the Surge North Property by paying the $75,000 in cash and issuing 1,500,000 Xplore Shares to the vendor upon acceptance of the Surge North Agreement by the TSXV. 

The vendor will retain a 2% NSR on the Surge North Property, one-half of which, being 1%, can be purchased by the Company at any time for $750,000.

The Surge North Agreement and the transactions contemplated therein are subject to the acceptance of the TSXV. 


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