Copper

Azarga Metals Corp. ("Azarga Metals" or the "Company") (TSXV:AZR) is pleased to announce that it has executed a binding letter of intent (the "Binding LOI") with Baker Steel Resources Trust Limited ("BSRT") agreeing the terms and conditions whereby BSRT will exercise its right to convert the US$3.5 million loan (the "Loan") made under the secured convertible loan facility (the "Loan Agreement") between Azarga Metals and BSRT. The Loan will be converted at a fixed Canadian dollar equivalent value of C$4.7 million, with a conversion price of C$0.10 per share for a total issue of 46,925,500 common shares of the Company (the "Shares

In exchange for BSRT converting the Loan prior to the maturity date of December 31, 2022, Azarga Metals has agreed to grant BSRT the option to acquire the Unkur project (the "Unkur Option"), until December 31, 2023, after which the Unkur Option will automatically expire (the "Option Period").

Gordon Tainton, President and CEO of the Company commented "the co-operation from BSRT to convert the Loan into shares will remove US$3.5 million of debt that would have otherwise been due in cash on December 31, 2022. This debt reduction provides the Company with the ability to further focus its attention on advancing the exploration of its 100% owned copper-rich VMS Marg project located near Keno City, Yukon. We look forward to commencing our planned exploration program at Marg this summer."

Binding LOI summary of terms:

BSRT agrees to exercise the conversion option under the Loan Agreement to convert the Loan into 46,925,500 common shares of the Company upon which the Loan will be paid and the Loan Agreement will be automatically terminated, and each party will be mutually released from all obligations under the Loan Agreement. BSRT shall be under no obligation to exercise the option to convert under the Loan Agreement unless and until BSRT has been granted the Unkur Option and all regulatory approvals required to exercise such option (including, if necessary, shareholder approval) have been obtained.

In consideration of US$1.00 and BSRT waiving all accrued interest otherwise due under the Loan Agreement to the date of conversion, the Company agrees to grant BSRT the option to acquire the Unkur project, located in Russia, on the following terms:

The Unkur Option will be exercisable from the date of termination of the Loan Agreement until December 31, 2023, after which, if not previously exercised by BSRT, the Unkur Option will automatically expire.

The Company will use its best efforts (while recognizing that sanctions and other force majeure circumstances may prevent these efforts), to maintain the corporate existence of its subsidiaries and its licences, including the Unkur project, on a care and maintenance basis during the Option Period.

If the Unkur Option is exercised by BSRT and Unkur is subsequently sold to an arms length third party within 2 years of the date of the exercise of the Unkur Option by BSRT, proceeds from the sale of the Unkur project will be shared between the Company and BSRT based on an agreed upon formula. During the Option Period the Company will grant BSRT a ROFR (right of first refusal) to match any third party offer received by the Company for the Unkur project. The parties agree to use reasonable efforts to work together during the Option Period to find potential buyers for the Unkur project.

The Company will move immediately to the preparation of adefinitive agreement and related documents in consultation with BSRT and its counsel and move to obtain receipt of regulatory approvals as required. Such definitive documentation will reflect the terms and conditions described in the Binding LOI.

Contingent Liability

In addition to the BSRT debt conversion, the rights to a US$6,200,000 milestone payment held by the original vendors of the Unkur project, has been cancelled. This milestone payment would have been owed if a mineral resource (adding measured, indicated and inferred resources of all deposits within the Unkur Project area) containing copper and silver to the equivalent of two million tonnes or more of copper where measured plus indicated resources comprise at least 70% of that estimate, taking the value of silver as copper equivalent had been estimated. This milestone payment was part of the terms of the acquisition of the Unkur Project in March 2016.

Marg Project

The Company owns 100% of the high-grade copper-rich VMS Marg project within the Keno Hill Silver District of the Yukon Territory. As previously announced, the Company is reviewing and re-interpreting the historic VTEM database of the airborne geophysical program to be used to refine the drill targets for the Company's planned 2022 exploration program. Drilling is expected to focus on the Marg deposit extensions and the highly prospective Jane Zone, which has the potential for another Marg-style deposit. Mineralization at the Marg project remains open along strike, down-dip and down plunge and drilling will be aimed at defining 14 to 15 million tonnes of mineralized material.

Planning for the 2022 exploration program has commenced. The program will begin with rebuilding the exploration camp and mobilizing equipment in June, drilling from July to September and disseminating drill results as available from September to November. An experienced geologist in VMS deposits and a full-service contractor has been engaged to execute and oversee this plan.

BSRT Early Warning Disclosure

BSRT currently owns 11,601,786 Shares, representing 8.9% of the issued and outstanding common shares of Azarga Metals. Upon conversion of the Loan, BSRT will acquire an additional 46,925,500 Shares, representing 36.0% of the issued and outstanding common shares of Azarga Metals (pre-conversion), to own an aggregate of 58,527,286 Shares, representing 33.0% of the issued and outstanding common shares of Azarga Metals and an increase of 24.1% of the enlarged share capital from the percentage of the Shares BSRT currently owns, pre-conversion.

BSRT also currently owns 20,440,914 warrants of the Company, each exercisable at a price of C$0.10 per warrant until December 31, 2022. Following conversion of the Loan and assuming exercise by BSRT of these warrants, BSRT would own 67,366,414 Shares of the Company, representing an aggregate ownership interest of approximately 34.0% of the issued and outstanding common shares of Azarga Metals (post-conversion and post-issuance of the warrants).

BSRT, Arnold House, St Julians Avenue, Guernsey, GY1 1WA holds the common shares for investment purposes. Depending on market conditions and other factors, BSRT may from time to time acquire and/or dispose of securities of Azarga or continue to hold its current position.

A copy of the early warning report required to be filed with the applicable Canadian securities commissions in connection the transaction will be available under the Company's profile on SEDAR at www.sedar.com and can be obtained by contacting Tino Isnardi at +44 (0) 20 7389 0009.

Azarga Metals Corp.

"Gordon Tainton"

Gordon Tainton,
President and CEO

For further information please contact: Doris Meyer, at +1 604 536-2711 ext. 3 or visit www.azargametals.com. The address of the head office of Azarga Metals is Unit 1 - 15782 Marine Drive, White Rock, BC V4B 1E6, British Columbia, Canada.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

This news release contains forward looking statements within the meaning of applicable securities laws. The use of any of the words "ambition", "estimate", "concluded", "offers", "objective", "may", "will", "should", "potential" and similar expressions are intended to identify forward looking statements. In particular, this news release contains forward looking statements concerning the: conversion of the Loan Agreement into common shares of the Company, execution of a definitive agreement memorializing the terms of the Unkur Option, receipt of any required regulatory approvals of the Unkur Option and the planned 2022 exploration program for the Marg project. Although the Company believes that the expectations and assumptions on which the forward looking statements are based are reasonable, undue reliance should not be placed on the forward looking statements because the Company cannot give any assurance that they will prove correct. Since forward looking statements address future events and conditions, they involve inherent assumptions, risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of assumptions, factors and risks. These assumptions and risks include, but are not limited to, assumptions and risks associated with the completion of other conditions precedent to the Loan Conversion and the Unkur Option, including the receipt of regulatory approvals, the state of equity financing markets, and results of future exploration activities by the Company, including the planned 2022 exploration program at the Marg project. Management has provided the above summary of risks and assumptions related to forward looking statements in this news release in order to provide readers with a more comprehensive perspective on the Company's future operations. The Company's actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward looking statements will transpire or occur, or if any of them do so, what benefits the Company will derive from them. These forward looking statements are made as of the date of this news release, and, other than as required by applicable securities laws, the Company disclaims any intent or obligation to update publicly any forward looking statements, whether as a result of new information, future events or results or otherwise.

SOURCE: Azarga Metals Corp.



View source version on accesswire.com:
https://www.accesswire.com/697878/Baker-Steel-Resources-Trust-Agrees-To-Convert-Loan

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AZR:CA
Azarga Metals

Azarga Metals

Overview

Russia is not only known for its vibrant cities, rich cultural history and brilliant architecture. It’s also home to some of the most prolific mining districts in the world. According to a report issued by the Fraser Institute for Mining, the country ranks amongst the top 25 jurisdictions in mining attractiveness. That same report revealed that the country boasts an investment attractiveness rating above 70 percent, outranking notable European countries like Sweden, Norway and Spain.

Russia seeks to benefit from Europe’s green energy plans as a major contributor to the world’s precious and base metals, like silver and copper. With several high-quality mines and mineral deposits scattered near the country’s eastern border, active investors could see significant gains and economic success by investing in this European giant.

Azarga Metals Corp. (TSXV:AZR) is a mineral exploration and development company focused on its 100 percent owned Unkur copper-silver project in the Zabaikalsky province in eastern Russia. The project sits in a geographically advantageous region that shares a border with China and Mongolia.

Unkur leverages strategic positioning in a mining-friendly jurisdiction home to Udokan, the third-largest undeveloped copper deposit in the world. The flagship project’s similar geological structure has the possibility to mimic Udokan’s mineralization and copper-silver yield.

Azarga Metals acquired the Unkur copper-silver project in 2016 and quickly began its extensive exploration program. To date, Azarga has comprised mapping, sampling and ground magnetic campaigns. The company has also conducted two diamond drilling programs across 16 drill holes and 186 meters of channel sampling.

Unkur boasts excellent terrain and infrastructure with rich resource networks, like water, high-voltage substations and accessible highway and railway transportation lines. The 5,390-hectare land position has a relatively flat geological profile, which aids in mining and open-pit conditions.

In April 2021, Azarga released positive updates on the flagship project, announcing its Preliminary Economic Assessment (PEA) study will consider various operating scenarios at Unkur, including a low capital and operating cost heap-leaching scenario. Consideration of these new methods creates the opportunity for lower capital expenditure and shorter timeline production for the company.

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The following steps for the company include planning its physical exploration program in the eastern part of Unkur, which it expects to commence in August 2021. The confirmed presence of extensive copper and silver mineralization at Unkur East in January 2021 from a geochemical surveying program demonstrates justification for further exciting exploration and development.

Azarga Metals Corp. has a proven board and management team with experience in Russian mining, capital markets and low-cost exploration. This leadership and its technical team prime the company for outstanding discoveries across Unkur’s potentially vast copper-silver resource.

Azarga Metals’ Company Highlights

  • Azarga Metals Corp is a mineral exploration and development company focused on its 100 percent owned flagship Unkur copper-silver project in the Chara-Aldan area in eastern Russia.
  • Unkur is a sediment-hosted stratiform copper-silver deposit with world-class discovery potential. Its current inferred resources hover 62 million tonnes at 0.53 percent copper and 38.6g/t silver grades.
  • The flagship project leverages excellent infrastructure with power and water on-site and advantageous positioning less than 30 kilometers from the world’s third-largest undeveloped Copper project known as Udokan.
  • Unkur East is relatively undeveloped and has limited exploration history, which gives Azarga an exceptional first-mover advantage in this mineral-rich region.
  • The company has a solid and well-versed management team of top mining and finance professionals with proven track records of success.
  • The neighboring Udokan Copper Project holds copper resources of 26.7 million tonnes (Mt) and is the 3rd largest undeveloped copper deposit globally.

Azarga Metals’ Key Projects

Unkur Copper-Silver Project

The flagship Unkur copper-silver project is a sediment-hosted stratiform copper-silver deposit located in the Zabaikalsky province in eastern Russia. The asset has a 25-year mineral exploitation license across 5,390 hectares and leverages access highways and railway transportation. Mining at Unkur is an open-pit conventional truck and excavator operation.

To date, work has comprised surface geologic mapping and geochemical sampling, approximately 130 line kilometers of ground magnetics geophysics, 4,580 meters of diamond drilling across 16 drill holes and 186 meters of channel sampling from four trenches. The initial results of this 2017 program revealed a maiden NI 43-101 resource estimate of 42 million inferred tonnes at 0.52 percent copper and 38g/t silver, containing 220,000 tonnes of copper and 52 million ounces of silver.

2020 exploration programs completed extensive drilling, metallurgy testing and geological modeling of mineralized envelopes. Recoveries reported up to 96.4 percent copper and 96.7 percent silver with leaching. Azarga remains very excited for new resource estimations and further development of this high-grade prospect.

Azarga Metals’ Management Team

Alexander Molyneux — Non-Executive Chair

Alexander Molyneux has over 20 years of metals and mining industry executive and financier experience. Since 2018, he has been the managing director and CEO of Galena Mining Ltd. Prior he was the CEO of Paladin Energy Limited, one of the world’s largest uranium companies, where he optimized its operating business and completed a US$700M successful recapitalization of the company and a re-listing on the ASX. Molyneux serves on several public company boards, including Ivanhoe Mines Group and Ivanhoe Energy, Argosy Minerals Ltd., Metalla Royalty & Streaming Ltd., Tempus Resources Ltd., Comet Resources Ltd. and AMWolf Capital Corp.

Gordon Tainton — President & CEO

Gordon Tainton is an experienced, successful business leader who, since the early 2000s, has held senior management and board positions in both public and private companies within the mining and extractive industries and physical commodity marketing. His project experience includes involvement with studies and development plans, trading, logistics, off-take agreements and project financing. Tainton also has significant expertise in project generation in the junior mining sector.

Tainton currently serves as a non-executive independent director on the board of Vancouver-based Northern Lights Resources Corp. and Metallum Resources Inc. He holds a BA from Simon Fraser University.

Dr. Alexander Yakubchuk — VP of Exploration

Dr. Alexander Yakubchuk has over 30 years of operational and executive experience in the Former Soviet Union, including Russia, Kazakhstan, Kyrgyzstan, Uzbekistan, Australia, Mongolia, China, Canada and several other European countries. He has been the director of Exploration of Orsu Metals Corporation since 2008.

Dr. Yakubchuk previously worked with and consulted companies such as BHP-Billiton, Norilsk Nickel, Goldcorp, Rio Tinto, World Bank and Inco and previously lectured as an Associate Professor Lomonosov Moscow State University for five years.

Dan O’Brien — CFO

Dan O’Brien is the CFO for several publicly listed exploration companies trading on the TSX and TSX Venture exchanges. He has over 15 years of experience in financial reporting for publicly traded mineral exploration companies and has held CPA & CA certification since 2007. O’Brien was previously a senior manager at a leading Canadian accounting firm specializing in the audit of public companies in the mining and resource sector.

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Baker Steel Granted Unkur Option and Converts Loan to Settle Debt

Baker Steel Granted Unkur Option and Converts Loan to Settle Debt

Azarga Metals Corp. ("Azarga Metals" or the "Company") (TSXV:AZR) is pleased to announce that it has closed the agreement (the "Agreement") with Baker Steel Resources Trust Limited ("BSRT") announced on April 19, 2022. Pursuant to the Agreement, Azarga Metals has granted BSRT the option to acquire Azarga Metal's Unkur project (the "Unkur Option") until December 31, 2023 (the "Unkur Option Period"), after which the Unkur Option will automatically expire

Upon closing the Agreement, BSRT exercised its right to convert the US$3.5 million loan (the "Loan") made under the secured convertible loan facility (the "Loan Agreement") between Azarga Metals and BSRT. The Loan was converted at a fixed Canadian dollar equivalent value of C$4.7 million, with a conversion price of C$0.10 per share for a total issue of 46,925,500 common shares of the Company (the "Shares").

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Doris Meyer is the Corporate Secretary of the Company. She gained her early experience in the mining industry as Vice President Finance of Queenstake Resources Ltd. from 1985 to 2003. Ms. Meyer launched her private company Golden Oak in October 1996 with Queenstake as her first client. Since that time, Golden Oak has provided publicly traded mineral exploration companies with administrative, financial reporting and corporate compliance services. Ms. Meyer is also Corporate Secretary and Director for a number of publicly listed exploration companies trading on the TSX-V. Ms. Meyer is a past member of the Institute of Chartered Professional Accountants of British Columbia. Ms. Meyer has been the Corporate Secretary of the Company since 2008.

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Baker Steel Executes Definitive Agreement to Convert Loan

Baker Steel Executes Definitive Agreement to Convert Loan

Azarga Metals Corp. ("Azarga Metals" or the "Company") (TSXV:AZR) is pleased to announce that it has executed a definitive agreement (the "Agreement") to supersede the binding letter of intent with Baker Steel Resources Trust Limited ("BSRT") announced on April 19, 2022. BSRT has agreed, subject to receipt of all required regulatory approvals, to convert the US$3.5 million loan between Azarga Metals and BSRT at a fixed Canadian dollar equivalent value of C$4.7 million, with a conversion price of C$0.10 per share for a total issue of 46,925,500 common shares of the Company (the "Shares

Pursuant to the Agreement, Azarga Metals has, amongst other things, granted BSRT the option to acquire the Unkur project (the "Unkur Option") until December 31, 2023, after which the Unkur Option will automatically expire. Closing of the Agreement is subject to receipt of regulatory approval and standard closing conditions.

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Azarga Metals Grants Stock Options and Director Resignation

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Vladimir Pakhomov has resigned from the Board of Directors with immediate effect. The Board wishes to thank Mr. Pakhomov for his many valuable contributions to the Company during his tenure as a director and wish him well in the future.

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Azarga Metals Focused on High-Grade Copper-Rich VMS Marg Project in Yukon

Azarga Metals Focused on High-Grade Copper-Rich VMS Marg Project in Yukon

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President, CEO and Director, Gordon Tainton, said: "We recently obtained access to the VTEM database of the airborne geophysical program previously conducted by GeoTech, Ontario. This underutilized historic VTEM database can now be reviewed and re-interpreted and used to refine the drill targets for the Company's planned 2022 exploration program. Drilling is expected to focus on the Marg deposit extensions and the highly prospective Jane Zone, which has the potential for another Marg-style deposit. Mineralization at the Marg project remains open along strike, down-dip and down plunge and drilling will be aimed at defining 14 to 15 million tonnes of mineralized material."

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