Calgary, Alberta – September 4, 2024 – TheNewswire – Labrador Resources Inc. (TSXV: LTX) ("Labrador" or the "Corporation") is pleased to announce that it has entered into a letter agreement (the "Agreement") dated September 3, 2024, to acquire (the "Acquisition") 100% of the issued and outstanding common shares of Critical Path Resources Corp. ("CPR"), wholly owned by Critical Path Minerals Corp. (the "Vendor"). CPR is an exploration and development company incorporated under the laws of Alberta holding sixteen (16) contiguous uranium exploration mineral claims covering 54,450 hectares in northern Saskatchewan. Located 60 km southwest of the Key Lake Uranium mine and mill, these claims are situated within the uranium-rich Wollaston-Mudjatik Transition Zone ("WMTZ"), which hosts one of the world’s highest-grade uranium deposits.

During 2005, a regional exploration program was conducted over the northeastern area of CPR's uranium claims which yielded promising results. Key findings included a showing grading 0.623% U3O8 and a hematitic regolith boulder at surface which indicates a nearby weathered basement and the potential for classic basement-hosted unconformity uranium deposits. Additionally, the area exhibited numerous uranium geochemical anomalies in lake sediment, soil, and rock samples and a cross-cutting fault network was identified which may have served as a "plumbing system" for uranium-rich fluid migration during fault reactivation.

"This strategic acquisition allows Labrador to diversify its energy portfolio with the addition of uranium claims in the WMTZ," commented Kaan Camlioglu, CEO of Labrador. "We are excited to integrate the technical expertise of the CPR team and advance exploration on these promising claims located in an area that is currently subject to significant exploration activities by industry participants."

Property Details

Mudjatik Uranium Project – SW Target
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Mudjatik Uranium Project – NE Target
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The CPR claims are located in North-Central Saskatchewan, in the WMTZ, situated southwest of the Key Lake uranium mine operations. The claims cover an area of 54,450 hectares and are centered at 56°36'3"N, 106°46'58"W. The property benefits from excellent regional infrastructure, including proximity to the Key Lake Road (Highway 914) and the high-voltage power grid supporting the nearby Key Lake uranium mine operations. Future work, planned for this year, will focus on defining drill targets for testing in early 2025.

Agreement Terms

Under the terms of the Agreement, Labrador will acquire 100% of the shares of CPR for total consideration of $940,000 (the "Consideration"). This will be paid through the issuance of common shares of Labrador (the "Labrador Common Shares") and cash payments over the next two years as follows:

1. a)On closing: i) by the payment of $290,000 via the issuance of 5,800,000 Labrador Common Shares at a deemed price of $0.05 per Labrador Common Share; and ii) a cash payment of $70,000; 

2. b)On the first anniversary of closing: by the payment of $290,000 via the issuance of that number of Labrador Common Shares as is arrived at by dividing $290,000 by the 20-day volume weighted average price ("VWAP") of the Labrador Common Shares on the TSX Venture Exchange ("Exchange") prior to the first anniversary of closing with such price not to be less than $0.075 per Labrador Common Share; and 

3. c)On the second anniversary of closing: by the payment of $290,000 via the issuance of that number of Labrador Common Shares as is arrived at by dividing $290,000 by the 20-day VWAP of the Labrador Common Shares prior to the second anniversary of closing with such price not to be less than $0.075 per Labrador Common Share (collectively, the "Consideration Labrador Common Shares"). 

The Consideration Labrador Common Shares will be subject to a voluntary hold period of 13-months from the date of issuance.

Labrador will also grant a 1.5% net smelter return royalty on the claims, which can be reduced to 0.75% for a $1 million payment which is only payable in cash.

Additionally, the Agreement provides that a $1 million bonus ("Bonus") is payable if a National Instrument 43-101 compliant resource report identifies at least five (5) million pounds of uranium on the claims within eight (8) years.  The Bonus is payable by either i) the issuance of Labrador Common Shares at a price equal to the 20-day VWAP of the Labrador Common Shares on the Exchange prior to their issuance ("Bonus Payment Labrador Common Shares"); or ii) in cash; or iii) in a combination thereof.  Any Bonus Payment Labrador Common Shares issued in respect of the Bonus are subject to a minimum price of $0.075.

The Agreement also provides that the issuance of Labrador Common Shares to the Vendor shall be restricted such that at no time may the number of shares owned by the Vendor exceed 19.99% of the then issued and outstanding Labrador Common Shares. This restriction applies to the Consideration Labrador Common Shares and the Bonus Payment Labrador Common Shares. The parties have agreed to include a provision in the formal agreements that if a Consideration or Bonus payment becomes due and the Corporation is unable to issue Labrador Common Shares as a result of this restriction, the Vendor will accept an interest free promissory note from the Corporation provided that the term of such promissory note shall be restricted to a maximum term of one (1) year.

The Agreements also provides that at closing of the Acquisition, one nominee of the Vendor will be appointed to the board of directors of the Corporation.

A finder’s fee in the amount of 250,000 Labrador Common Shares is payable to Dean Stuart. No other finder’s fees or commissions or similar fees are payable to any party with respect to the Acquisition.

To fund the exploration and development of the acquired assets, Labrador plans to complete a private placement financing of at least $800,000 (the "Financing"). The Financing will include both "flow-through" and "hard dollar" units on terms to be determined in consultation with prospective agents for the Financing.

In connection with the Acquisition, Tailwind Capital Partners Inc. has agreed to convert the amounts owing by the Corporation in the amount of $302,500 into Labrador Common Shares at a price of $0.05 per Labrador Common Share.

Kasten Debt Restructuring

The Agreement requires that the existing indebtedness of Labrador (the "Kasten Debt") to Kasten Energy Inc. ("Kasten") be restructured such that instead of it being a first charge against all of the assets of the Corporation, any action for repayment of the Kasten Debt shall be restricted to the oil and gas assets of the Corporation. As of July 31, 2024, the Kasten Debt consists of a note payable in the amount of $256,183 (including accrued interest) ("Note Payable") and a convertible debenture in the amount of $350,000 ("Convertible Debenture").

As consideration for Kasten agreeing to the restructuring, Labrador has agreed to pay a fee of $50,000 payable by the issuance of 1,000,000 Labrador Common Shares at a deemed price of $0.05 per share.

The Kasten Debt restructuring agreements will include the following provisions:

• The term of both the Note Payable and Convertible Debenture will be extended to two (2) years from closing of the Acquisition. 

• The conversion price related to the Convertible Debenture shall not be less than $0.075 per Labrador Common Share during the first year following the closing date of the Acquisition and $0.10 per Labrador Common Share thereafter. 

• The Note Payable will remain non-convertible.  

• Kasten shall not be entitled to convert the Convertible Debenture earlier than one year less one day following the closing date of the Acquisition. 

• Any Labrador Common Shares issued in connection with conversion of the Convertible Debenture will be subject to voluntary escrow whereby such shares shall be restricted from trading for a period of thirteen (13) months following their issuance. 

All components of the proposed Acquisition remain subject to customary closing conditions including approval of the Exchange.

William Dynes, P.Geo., a consultant to CPR, is the Qualified Person under National Instrument 43-101 who has reviewed and approved the technical content of this news release.

About Labrador Resources Inc.

Labrador Resources Inc. is a resource exploration company focused on the acquisition and development of uranium and rare earth projects in Canada's Athabasca Basin and the development of an oil and gas property in the Atlee area of Alberta.

Contact

Kaan Camlioglu, President and CEO

T: 403 818 1091

E: kcamlioglu@yahoo.ca

 

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Cautionary Note

The Acquisition is non-binding and there can be no assurance that the proposed transaction will be completed as proposed or at all. The definitive agreement is expected to contain other representations, warranties, covenants and conditions as are customary for a transaction of this nature. The closing of the Acquisition is subject to the completion of due diligence; the negotiation of the definitive agreement and other final documentation; compliance with applicable laws and corporate and regulatory approvals, including the approval of the Exchange.

Forward-Looking Information

This news release contains statements and information that, to the extent that they are not historical fact, may constitute "forward-looking information" within the meaning of applicable securities legislation. Forward-looking information is typically, but not always, identified by the use of words such as "will", "intended", and similar words, including negatives thereof, or other similar expressions concerning matters that are not historical facts. Forward-looking information in this news release includes, but is not limited to, statements regarding: the entering into of a definitive agreement, completion of the Acquisition, the terms and completion of the Financing, the terms and completion of the Kasten Debt restructuring, and the receipt of regulatory and Exchange approvals. Such forward-looking information is based on various assumptions and factors that may prove to be incorrect. Although the Corporation believes that the assumptions and factors on which such forward-looking information is based are reasonable, undue reliance should not be placed on the forward-looking information because the Corporation can give no assurance that it will prove to be correct or that any of the events anticipated by such forward-looking information will transpire or occur, or if any of them do so, what benefits the Corporation will derive therefrom. Actual results could differ materially from those currently anticipated due to a number of factors and risks including, but not limited to the risk that the Exchange will not provide acceptance, and the impact of general economic conditions.

The forward-looking information included in this news release is made as of the date of this news release and the Corporation does not undertake an obligation to publicly update such forward-looking information to reflect new information, subsequent events or otherwise, except as required by applicable law.

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