Mr. James Walker reports

ARES STRATEGIC MINING CLOSES FIRST TRANCHE OF NON-BROKERED PRIVATE PLACEMENT OFFERING

Ares Strategic Mining Inc. has closed the first tranche of its previously announced offering of units by issuing 9,017,772 units at a price of 18 cents per unit, for aggregate gross proceeds of $1,623,198.96.

On Aug. 22, 2024, the company announced a non-brokered private placement offering of units (LIFE offering) at a price of 18 cents per unit pursuant to the listed issuer financing exemption under Part 5A of National Instrument 45-106 (Prospectus Exemptions).

For additional details relating to the LIFE offering and LIFE offering, please see the company's previously filed news releases which are available under the company's profile on SEDAR+.

Each unit consists of one common share in the capital of the company and one non-transferable common share purchase warrant. Each warrant is exercisable into one common share at a price of 26 cents per warrant share for a period of two years following the closing date of the amended LIFE offering, provided that, if the 10-day volume-weighted average trading price of the common shares as quoted on the Canadian Securities Exchange (or such other securities exchange on which the common shares may be traded at such time) is equal to or greater than 40 cents at the close of any trading day, then the company may, at its discretion, accelerate the expiry date of the warrants by issuing a news release announcing that the expiry date of the warrants shall be deemed to be on the 30th day following the date of the warrant acceleration news release. All warrants that remain unexercised following the accelerated expiry date shall immediately expire and all rights of holders of such warrant shall be terminated without any compensation to such holder. Units offered under the LIFE exemption will not be subject to resale restrictions for Canadian resident investors pursuant to applicable Canadian securities laws.

The LIFE offering, as facilitated by Capiche, can be accessed on-line and is anticipated to close on or before Oct. 6, 2024, and completion of the LIFE offering is subject to certain conditions including, but not limited to, a minimum of $500,000 in gross proceeds being raised by the company under the LIFE offering and the receipt of all necessary regulatory and other approvals.

The close of the LIFE offering is subject to certain conditions, including, but not limited to, the receipt of all necessary regulatory and other approvals. The company intends to use the proceeds of the LIFE offering as disclosed in the LIFE offering document dated Sept. 17, 2024, which is available under the company's profile on SEDAR+ and on the company's website.

Concurrently with closing the first tranche, the issuer entered into certain hedging arrangements with Sorbie Bornholm LP governed by an ISDA master agreement dated Aug. 23, 2024, and a sharing agreement dated Aug. 23, 2024. Pursuant to the terms of the sharing agreement, the gross proceeds payable by Sorbie for units pursuant to the private placement (being $1.5-million) were used to acquire U.K. government bonds as credit support to secure the issuer's maximum potential exposure under the sharing agreement, with Sorbie retaining control and direction of such proceeds (including both the economic benefit and the risk resulting from fluctuations in the bond pricing and foreign exchange) until they are released back to the issuer in accordance with the terms of the sharing agreement.

The hedging transactions governed by the sharing agreement will be determined and payable in 24 monthly settlement tranches based on the volume-weighted average price of the common shares for the 20 trading days prior to each monthly settlement date measured against a benchmark price of 26.1 cents. On each such settlement date, Sorbie will release a portion of the posted support determined in reference to such volume-weighted average ($62,500 per month). If the measured common share price is equal to the benchmark price for each of the 24 monthly settlement tranches, the issuer will receive cash payments totalling $1.5-million. If the measured common share price exceeds the benchmark price, the issuer will receive more than 100 per cent of the settlement payable that month on a pro rata basis. Similarly, if the measured common share price is below the benchmark price, the issuer will receive less than 100 per cent of the settlement payable that month on a pro rata basis, with the result that if the measured common share price is below the benchmark price for a period of time, the issuer will receive less than $1.5-million.

We seek Safe Harbor.