Arras Minerals Corp. (“Arras” or “the Company”) is pleased to announce it has entered into an agreement (the “Strategic Alliance Agreement” or the “Agreement”) with Teck Resources Limited (“Teck”) to form a Strategic Alliance focusing on exploration for critical minerals on Arras’ strategically located license package in the Bozshakol-Chingiz Magmatic Arc located in Pavlodar, Kazakhstan.
The Strategic Alliance does not include the Beskauga copper-gold project, nor the regional exploration licenses Stepnoe, Ekidos, Aimandai and Elemes.
- Teck to solely fund generative exploration work through 2025 with initial expenditures of US$5 million before December 31, 2025, across Package “A” and Package “B” (see map below) 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.
Tim Barry, CEO, commented, “As an early-mover into Kazakhstan two and a half years ago, following the substantial reforms to the business environment and mining law, Arras has assembled the third-largest land package in the country next to Rio Tinto and Fortescue and is specifically focused on copper in the highly prospective Bozshakol-Chingiz magmatic arc. We recently completed our second summer field season across the regional license package and are now analyzing more than 50,000 soil samples we have collected across the approximately 3,300 square kilometre license package. This program was based on the successful 2022 field program where more than 16,000 soil samples identified new targets to follow up.”
Mr. Barry added, “We believe that the exploration work we have undertaken over the past two summer field seasons representing in most cases the first material modern exploration work done across these licenses since pre-1990, have delineated substantial prospects for a material copper discovery, akin to the successful operations of the Bozshakol and Nurkazgan mines located within the same geological belt.”
Darren Klinck, President, commented, “We are very pleased to be partnering and working with Teck to advance a portion of our regional license package in Kazakhstan. Following their strategic equity investment into Arras last November, this Agreement provides Teck the option to invest significant funds into critical minerals focused exploration through Arras’ project portfolio and it is a clear indication of the potential that exists in the Bozshakol-Chingiz Magmatic Arc. This initiative in Kazakhstan highlights the emerging opportunities in the country and also demonstrates Kazakhstan’s strong position to be a key player globally as the world seeks to secure the necessary critical minerals required over the coming decades.”
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.
Elemes, Aimandai, Stepnoe & Ekidos Exploration Licenses
The Elemes, Aimandai, Stepnoe and Ekidos Exploration licenses totaling more than 1,150 square kilometres are not subject to the Strategic Alliance Agreement but Teck will retain a right of first offer over Elemes and Aimandai should Arras wish to seek partnership proposals in the future.
Arras successfully collected more than 30,000 soil samples from the Elemes and Aimandai licenses during the summer field season this year. This program followed up on the inaugural field program in 2022 where new targets were identified. The Company expects to have these samples analyzed and modelled in Q1 2024 and will evaluate opportunities to drill-test certain high-priority targets in 2024.
Webinar – Friday December 8th
The Company will host a webinar to discuss the Strategic Alliance in more detail on Friday December 8th at 800am PST. Please contact the company at [email protected] for further information. A replay of the webinar will be made available on the Company website.