In December 2023 Arras Minerals formed a strategic alliance with Teck Resources to explore for critical minerals on Arras’ strategically located license package in the Bozshakol-Chingiz Magmatic Arc located in Pavlodar, Kazakhstan.

Teck will solely fund generative exploration work through 2025, with initial expenditures of US$5 million totalling approximately 1,736 square kilometres.

Following the initial generative exploration phase, Teck will have the option to select up to four designated properties totalling 120 square kilometres each where Teck will fund exploration expenditures of up to US$47.5 million per project to have the right to earn up to a 75% interest in each project.

Teck will reimburse Arras for certain project related expenses made to date by Arras through a US$1 million cash payment on signing and potentially other payments in the future should Teck elect to advance through future phases.  Arras will act as manager for the initial year of the two-year generative program with Teck holding the option to assume the role of manager thereafter. 

Summary of Strategic Alliance Agreement Terms:

• Teck has the option to sole fund US$2.5 million per License Package for a generative exploration program totaling US$5 million through 2025. Of this, US$2 million (US$1 million on each package) is a firm commitment to complete in 2024.

• Teck will reimburse previous exploration expenditures made by Arras for the amount US$500,000 for each Package “A” and Package “B” totaling US$1 million.

• Following the completion of the initial generative exploration phase of the Strategic Alliance Agreement, Teck will have the option to select up to four Designated Properties from within the Strategic Alliance Agreement Licenses. Each Designated Property shall be contiguous and no larger than 120 square kilometres, with such designation subject to ministerial approval. Teck will make a cash payment of US$500,000 to Arras for each Designated Property as an additional reimbursement for previously invested exploration expenditures.

• “First Option”: Teck may elect to sole fund US$5.5 million over the next two years (US$2.5 million committed in Year 1) and on completion will be deemed to own 51% of the Designated Property.

•  “Second Option”: Teck may elect to sole fund US$18 million over the next three years (US$5 million committed in Year 1) to earn an additional 14% (total of 65%) of the Designated Property.

• “Third Option”: Teck may elect to sole fund US$24 million over four years (US$6 million committed in Year 1) to earn an additional 10% (total of 75%) of the Designated Property.

• Arras will act as manager for the initial year of the generative exploration phase and Teck will have the right to assume the role of manager thereafter.  Arras and Teck will establish a Technical Committee to develop and review the annual exploration programs, with Teck having final approval.