Mr. John Miniotis reports

ABRASILVER ANNOUNCES PROPOSED EARN-IN OPTION & JOINT VENTURE AGREEMENT ON LA COIPITA PROJECT

Abrasilver Resource Corp. has entered into a binding letter agreement with a subsidiary of Teck Resources Ltd., with respect to a proposed option and joint venture agreement, to explore and develop the La Coipita copper-gold project in San Juan, Argentina.

The agreement provides that, subject to certain conditions, Abrasilver and Teck will enter into the option agreement to grant Teck an option to acquire an 80-per-cent interest in La Coipita by financing cumulative exploration expenditures of $20-million (U.S.) over a five-year period, making staged cash payments to, and an equity placement in, Abrasilver totalling $3-million (U.S.) (including an initial mandatory payment of $500,000 (U.S.)), and making up to $6.3-million (U.S.) in optional cash payments in respect of amounts payable to the underlying project vendors. Following an initial transition period during which Abrasilver will support field operations, Teck will act as operator for the duration of the option.

John Miniotis, president and chief executive officer, commented: "We are delighted about the opportunity to secure a significant exploration agreement with Teck to advance the large-scale La Coipita project, which is located in a prolific copper porphyry district. This strategic collaboration will mark a significant milestone for the project and greatly enhance the potential for a major copper discovery. This transaction will represent a strong endorsement of the exploration potential at La Coipita and we look forward to working closely with Teck to unlock value for all stakeholders."

Key terms of the transaction

Pursuant to the agreement, Abrasilver and Teck have agreed to enter into the option agreement wherein Abrasilver will grant Teck an option to acquire an 80-per-cent interest in the project. The option agreement will provide that Teck may exercise the option by:

• Making the following payments to, or equity placement in, Abrasilver:
  1. Upfront cash payment of $500,000 (U.S.) upon entering into the option agreement;
  2. On or before Jan. 31, 2025, a cash payment of $1-million (U.S.) or, at Teck's election, subscription for $1-million (U.S.) of common shares of Abrasilver to be priced at the greater of: (a) a 25-per-cent premium to the preceding 20-day volume-weighted average price (VWAP) of the shares on the TSX Venture Exchange; or (b) 35 cents per share; and
  3. On or before Jan. 31, 2028, a cash payment of $1.5-million (U.S.).
• Incurring an aggregate of $20-million (U.S.) in exploration expenditures on the project over a five-year period; and
• Making up to $6.3-million (U.S.) in optional cash payments in respect of amounts payable to the underlying project vendors.

Upon exercise of the option, the parties will incorporate a company in Argentina (Newco) to become the titleholder of the project. Teck will hold 80 per cent of Newco's outstanding shares, with Abrasilver holding the remaining 20 per cent. Each party will finance its pro rata share of future expenditures on the project through equity contributions to Newco or incur dilution in Newco. If a party's shareholding interest in Newco is diluted below 10 per cent, or pursuant to certain other conditions of the option agreement, its shareholding interest will be converted to a 1.1-per-cent net smelter return (NSR) royalty on the project, of which 0.6 per cent can be bought back by the payor for a cash payment of $3-million (U.S.) at any time.

The transaction remains subject to, among other things, the negotiation and execution of a definitive option agreement and related documents, and the satisfaction or waiver of any conditions precedent in the agreement (including the receipt of any requisite approvals). The company and Teck are expecting to enter into the option agreement on or about Jan. 14, 2024, but there can be no certainty that the transaction will be completed on the terms described in this press release, or at all.

The La Coipita project

The La Coipita project is a district-scale property consisting of over 70,000 hectares in the western portion of Calingasta department, located in the mining-friendly San Juan province of Argentina, adjacent to the Chilean border. Access to the area is via Calingasta, the nearest town, along 125 kilometres of unpaved road to the Los Azules Cu-Mo (copper-molybdenum) porphyry project and then north along a dirt road to the La Coipita Cu-Au (copper-gold) project. Elevation across the property ranges between 3,500 metres and 4,500 metres above sea level, with moderate to high relief.

The project lies within the Miocene porphyry-epithermal belt of Argentina and Chile. During the mid-Miocene, the area developed an active magmatic arc on its western side and a back-arc extensional environment to the east. Contemporaneous with the deposition of volcanic/volcaniclastic rocks was the emplacement of porphyry Cu-Mo-Au and/or epithermal Au-Ag (gold-silver) (Cu) systems (for example, Filo del Sol high-sulphidation epithermal Cu-Au-Ag deposit with Cu-Au porphyry, Los Pelambres/El Pachon Cu-Mo porphyry, Los Azules Cu-Au-Mo porphyry and El Indio/Veladero/Pascua Lama high-sulphidation epithermal Au cluster).

Numerous target areas have been identified at La Coipita. These target areas have coincident geophysical, geological and geochemical features that are consistent with copper-gold mineralized porphyry-type intrusions, either beneath high-sulphidation systems or in structurally uplifted areas. To date, drilling has only been conducted on the La Coipita target, where the initial results have identified the potential for a major Cu-Au-Mo porphyry system. Significant exploration upside potential is believed to exist at the La Coipita target and across multiple other promising regional targets.

Qualified person

David O'Connor, PGeo, chief geologist for Abrasilver, is the qualified person as defined by National Instrument 43-101 -- Standards of Disclosure for Mineral Projects, and he has reviewed and approved the scientific and technical information in this news release.

About Abrasilver Resource Corp.

Abrasilver is an advanced-stage exploration company focused on rapidly advancing its 100-per-cent-owned Diablillos silver-gold project in the mining-friendly Salta province of Argentina. The current measured and indicated mineral resource estimate for Diablillos consists of 53.3 million tonnes (Mt) grading 87 grams per tonne (g/t) Ag and 0.79 g/t Au, containing approximately 148 million ounces (Moz) silver and 1.4 Moz gold, with significant further exploration upside potential. In addition, the company has entered into an earn-in option and joint venture agreement with Teck on the La Coipita project, whereby Teck can finance up to $20-million (U.S.) in exploration expenditures and make certain other payments to earn up to an 80-per-cent interest.

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