Kiska Signs Letter Agreement on Copper Joe Project and Mobilizes Drill Program

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Aug. 27, 2014) - Kiska Metals Corporation (TSX VENTURE:KSK) ("Kiska" or the "Company") is pleased to announce that it has entered into a binding letter agreement (the "Letter Agreement") with First Quantum Minerals Ltd. ("First Quantum"). Pursuant to the Letter Agreement, First Quantum was granted an exclusive right, without obligation, to enter into a formal option agreement pursuant to which First Quantum would be granted an option to earn up to an 80% interest in the Copper Joe Project located in Alaska. Kiska holds an exclusive right to acquire a 100% interest in the mining claims that comprise the Copper Joe Project from Kennecott Exploration Company ("Kennecott") pursuant to an option agreement which was amended to, among other things, permit the transfer of rights or interests of Kiska under the Copper Joe Agreement to First Quantum (the "Copper Joe Agreement").

Highlights:

• Pursuant to the Letter Agreement, First Quantum acquired a right to enter into a formal option to joint venture agreement by providing notice to Kiska by March 31, 2015.
  • First Quantum will fund and Kiska will operate an initial 1,500 metre drill program commencing in early September 2014 to test geochemical and geophysical targets on the Copper Joe Project.
  • Kiska will receive an initial cash payment of US$10,000 and annual cash payments of US$50,000 beginning on the first anniversary of the Letter Agreement.
• The option to joint venture agreement will provide that:
  • First Quantum can earn an initial 51% interest in the Copper Joe Project by funding expenditures of US$5,000,000 by December 31, 2017, with Kiska retaining a 49% carried interest. (Kiska may exercise its option under the Copper Joe Agreement to acquire a 100% interest in the Copper Joe Project upon the expenditure of US$5,000,000 by December 31, 2018, and upon the vesting of Kiska's interest, 51% of such interest will be transferred to First Quantum).
  • First Quantum's interest will increase by a further 29% (80% total) when a decision to mine is made. Upon the decision to mine, First Quantum has the right to require Kiska to sell its remaining interest (20%) to First Quantum, and Kiska has the right to require First Quantum to purchase its interest in the joint venture, for a predetermined amount. Following the decision to mine, if Kiska's remaining 20% interest has not been sold, First Quantum and Kiska will each be responsible for their proportionate share of the joint venture funding, provided that First Quantum will lend to Kiska its share of the joint venture funding costs (Kiska's interest will be carried).

• The Copper Joe Agreement, as amended, provides that:
  • First Quantum will deliver to Kennecott cash payments of US$10,000,000 upon the completion of a pre-feasibility study, and US$5,000,000 upon the announcement of a decision to mine (the "Milestone Payments").
  • In addition to the Milestone Payments, Kennecott will retain a royalty on the Copper Joe Project.

"Kiska is very pleased to be able to restructure the Copper Joe Agreement, and welcome First Quantum as a new partner on the Project. The agreement provides Kiska with the opportunity to retain an important carried interest in the Project, and is an excellent example of Kiska executing the prospect generator business model to create shareholder value", stated Kiska's President, Grant Ewing.