Teck Resources, Grid Metals execute definitive option, joint venture agreement

Grid Metals has executed a definitive option and joint venture agreement with Teck Resources (TECK) to explore and develop the Mawka nickel project in southeastern Manitoba, Canada. The Makwa nickel project sits on the southern arm of the Bird River Greenstone Belt approximately 145 km from Winnipeg, the provincial capital. The focus of the Agreement will be the discovery of a Tier 1 magmatic nickel-copper-PGM-cobalt deposit at Makwa. Grid will maintain its 100% interest and exploration program at Mayville Cu-Ni Property located 30km to the north of Makwa. The Agreement grants Teck a two-stage option to acquire up to a 70% interest in Makwa by funding cumulative expenditures of C$15,700,000 and making staged cash payments of C$1,600,000 to Grid. Teck’s minimum commitment under the agreement is the initial C$400,000 cash payment. Following completion of additional geophysical surveying, Teck would be committed to funding C$450,000 of minimum expenditures. The Agreement is subject to TSX-V approval. Key Project Milestones at the Makwa Project include: The recent consolidation of the known nickel copper sulfide occurrences and deposits at Makwa; The delineation of a pit-constrained nickel sulfide resource at the former Makwa mine site announced in 2024; A recent exploration agreement and ongoing collaboration with the Sagkeeng First Nation on whose ancestral lands the Makwa Project is situated Grid assembling of a base metals technical team led by Dave Peck, P. Geo., who was instrumental in positioning the project to attract a partner like Teck. Transaction Terms Pursuant to the Agreement, Teck has the options to acquire up to an 70% interest in the Makwa nickel property. Teck may exercise the first option by making an aggregate of C$600,000 in cash payments, including a firm commitment of C$400,000, and incurring an aggregate of C$5,700,000 in exploration expenditures over four years. Upon completion of the First Option requirements above and delivery of notice thereof to Grid, Teck would have exercised the First Option, and the Property would be owned by Teck as to 51% and Grid as to 49%. If Teck exercises the First Option, Teck will have a further sole and exclusive option to acquire an additional 19% interest in the Property. Teck may exercise the Second Option by incurring a further C$10,000,000 in exploration expenditures over a period of three years commencing on the date of the First Option Exercise Notice and making a payment of C$1,000,000 in cash or, at Teck’s election and subject to TSX-V approval, through a subscription for Grid shares priced at a 25% premium per share to the preceding 20-day volume weighted average price per share. Provided that Teck exercises the First Option, a contractual joint venture will be formed between Grid and Teck. Thereafter, each Party would fund its pro-rata share of future expenditures on the Property or incur dilution. For a period of six months following the formation of the Joint Venture, Grid may elect to defer the contributions required to fund its pro-rata share of expenditures, for which Teck would agree to temporarily contribute in lieu. Should Grid elect to defer contributions during the Initial Period, Grid would have until twelve months after the formation of the Joint Venture to reimburse Teck for the Grid Deferrals, otherwise Grid would incur proportionate dilution. The party with the majority interest shall be the “Operator” of the Joint Venture, and each party would control their pro-rata share of offtake from the Property. If a party’s interest in the Property is diluted below 10%, its interest would be converted to a 1.5% NSR royalty on the Property, of which 0.75% could be bought back by the royalty payor at any time for a cash payment of C$2,000,000. Of the remaining 0.75% NSR royalty on those claims held by Gossan, 0.5% could be bought back by the royalty payor at any time for a cash payment of C$2,000,000.