Mr. Eric Roth reports

CAPELLA ANNOUNCES DEFINITIVE AGREEMENT FOR THE SALE OF IS CENTRAL NORWAY COPPER-COBALT PROJECTS TO NICKELX AND FINANCING UPDATE

Capella Minerals Ltd. has entered into a binding asset sale agreement with NickelX AS, a private Norwegian mining company, through which it will divest its interests in the Hessjogruva, Kjoli and Lokken copper-zinc-cobalt projects located in Trondelag province, central Norway.

NickelX currently holds 100-per-cent interests in four nickel exploration projects in northern Norway (namely Hamn, Palfjellet, Birgivi and Envold) and is in the process of undertaking an initial public offering (IPO) with the combined assets on Oslo's Euronext Growth Exchange with the objective of becoming Norway's leading independent battery metals company.

The total consideration of the transaction to Capella, payable upon completion of the NickelX IPO, is $7-million through a combination of cash and NickelX shares.

Eric Roth, president and chief executive office of Capella, said: "Capella is pleased to have reached this agreement with NickelX providing for the creation of a premier Norwegian battery metals company. Combining our central Norway copper projects with NickelX's exploration properties and then listing on the Oslo Euronext Exchange will ensure that our projects are benefited through access to local capital and stakeholders rewarded through advancement of the project portfolio. The transaction will also allow us to further focus on our organic operations in Finland while, through the contemplated distribution of NickelX shares, enabling our shareholders to retain direct exposure to the strong upside of those assets. We are very confident that NickelX has the technical and financial capabilities, through its access to the Nordic capital markets, along with the depth of expertise and vision to advance further the exciting development phases of the assets and to become the Norwegian critical minerals champion requires for the energy transition."

Main terms of the transaction

Capella has agreed to sell its 100% interests in the Assets to NickelX under the following main terms:

• Capella will receive at closing of the transaction $5-million in cash;
• Capella will also receive new NickelX shares with a value of $2-million to be issued and allotted to the company at the IPO. Thereafter, Capella intends to distribute the share consideration to its shareholders on a pro-rata basis. Further information about such distribution and return on capital to Capella's shareholders will be given in connection with the completion of the transaction. Completion of the transaction is conditional upon (i) the successful IPO of NickelX on Euronext Growth Exchange in Oslo, (ii) Capella shareholders' approval, (iii) receipt of the written consent of each counterparty to some existing royalty agreements and (iv) TSX Venture Exchange approval. Closing of the transaction is expected to take a couple of months with a long-stop date agreed by the parties of April 7, 2024, following which each party retains the option to terminate the transaction.

Financing update

To allow fair dissemination of the news of the transaction, the company has determined to cancel its previously announced private placement (June 13, updated Aug. 31, 2023) to ensure that participants in the private placement can be fully informed of the transaction.

Consequently, the company wishes to announce a new non-brokered private placement, under the same terms as the previous financing of up to 33 million units at a price of three cents per unit to raise gross proceeds of up to $1-million. The company had already secured an initial commitment of $357,000 from an existing European-based shareholder with a focus on the metals required for the green energy transition.

Concomitantly, the company is also pleased to report a $500,000 lead order in the revised private placement by Julien Balkany, a founder and related party to NickelX, through one of his personal investment vehicles. Mr. Balkany has agreed to the lead order subject to the same terms as conditions of the private placement, which is not tied to the closing of the transaction. For clarity, Mr. Balkany will not be become an insider of Capella as he will not own more than 9.9 per cent of the common shares of the company.

Each unit of the private placement consisting of one common share in the capital of the company and one-half of a share purchase warrant, with each whole warrant entitling the holder to purchase one additional common share at a price of six cents per share at any time within two years from the date of issuance. The warrants shall also be subject to an accelerated exercise clause in the event the company's share price exceeds 15 cents for 10 consecutive trading days.

Proceeds from the private placement, assuming total amount raised, are anticipated to be expended as to 50 per cent on advancing the company's northern Finland gold-copper assets and 50 per cent for payment of accounts payable and for general working capital purposes.

The company may pay finders' fees in either cash, shares, share purchase warrants or a combination thereof, as permitted by regulators, on a portion of the private placement and of the transaction. All securities issued under the private placement will be subject to a hold period of four months from the date of issuance.

The company intends to complete the private placement prior to the end of the month, upon receipt of conditional approval from the TSX Venture Exchange.

About Capella Minerals Ltd.

Capella is engaged in the exploration and development of quality mineral resource properties in favourable jurisdictions, with a focus on European base and battery metals projects.

We seek Safe Harbor.