North Arrow Closes $2.42M Private Placement Financing and Sale of Royalty Interests in Loki Project, NWT - Seite 2

About the DeStaffany Lithium Project

The DeStaffany Lithium Project is located on the shore of Great Slave Lake, approximately 115 km east of Yellowknife, NWT. The property hosts the Moose 1 and Moose 2 lithium-tantalum-niobium pegmatites, which form part of the Yellowknife Pegmatite Province. The Moose pegmatites were initially evaluated in the 1940’s for tantalum and niobium. Despite the exposure of very large spodumene crystals up to one metre in length within historic mine workings, the Moose pegmatites have never been subject to a focused evaluation of their lithium potential. Spodumene is the primary lithium-bearing mineral of interest in these deposits and sampling of exposed mineralization should allow for spodumene recovery and characterization studies to be conducted in parallel with initial delineation drilling in 2023. A review of satellite imagery and historic rock geochemistry datasets has identified additional target areas for potential discovery of new spodumene pegmatites on the property.

Loki Project Royalty Sale

North Arrow has also closed the sale of 0.5% royalty interests in the Loki Project for proceeds of $374,000, as previously announced in a North Arrow news release dated March 6, 2023. The Loki Project is located in the Lac de Gras region of the Northwest Territories.

On closing the sale, Umgeni Holdings International Limited (“Umgeni”) increased its royalty interests in the Loki Project from 2.0% to 2.5% in exchange for payment of $374,000 to North Arrow. The royalties consist of net smelter return royalties on base and precious metals and a gross overriding royalty on diamonds. North Arrow has the option to purchase 0.5% of the royalties by paying Umgeni $5,000,000 any time up to 24 months after the start of commercial production from a mine on the property. In addition, North Arrow will issue to Umgeni 1,000,000 shares of North Arrow upon announcement of a new kimberlite discovery on the property and will issue a further 5,000,000 shares of North Arrow upon announcement of a mineral resource (in any category) in respect of a kimberlite within the property.

Umgeni is a private company of which Christopher Jennings, a director of North Arrow, is a beneficiary of the sole shareholder.

The issuance of any shares to an insider constitutes a "related party transaction", as defined under Multilateral Instrument 61-101 ("MI 61-101"). The transaction is exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 as neither the fair market value of any shares issued to, nor the consideration paid, by such persons would exceed 25% of North Arrow’s market capitalization.