Mr. Harry Barr reports

METALQUEST MINING COMPLETES SALE OF ITS MINORITY INTEREST IN ITS MURRAY BROOK POLYMETALLIC PROJECT TO CANADIAN COPPER BATHURST MINING DISTRICT NEW BRUNSWICK

Further to the news release dated Sept. 12, 2023, Metalquest Mining Inc. has provided an update on the sale of Metalquest Mining's minority share of the Murray Brook polymetallic project, located in the Bathurst mining camp, New Brunswick. By mutual agreement both parties, Metalquest Mining and Canadian Copper Inc. (CCI) have signed an asset purchase agreement dated January, 2024. To the end, CCI and Metalquest Mining have concluded the sale of Metalquest Mining's 28.2-per-cent (as of February, 2023) interest in and to the Murray Brook mining lease 252 and claim block 4925 situated in Restigouche and Northumberland counties, New Brunswick (collectively, the mining asset). CCI also signed a definitive purchase agreement with Votorantim Metals Canada (VMC) on Aug. 2, to acquire VMC's majority interest in Murray Brook. On Jan. 30, 2024, Metalquest Mining received its issuance of shares and warrants and the funds have settled into the treasury of Metalquest Mining.

Harry Barr, chairman and chief executive officer, states: "We are pleased to have closed the deal with Canadian Copper Inc. (CCI) to sell our minority interest in the Murray Brook polymetallic project. Over the term of the agreement, we may receive up to $2.3-million in cash. As part of the asset purchase agreement, the company has received 2.5 million units of the company's shares. The 2.5 million warrants are for five years from the date of issuance. MQM has been issued a royalty of 0.33 per cent. CCI will have the right to purchase half of the 0.33-per-cent royalty for $1-million. A final instalment of $1-million will be paid to Metalquest within 31 days of the initiation of commercial production. As a reminder to shareholders, MQM already has an additional 0.67 per cent of a royalty from an earlier transaction. The sale of this asset will constitute a non-dilutive financing for the company, and still allow us to participate in the upside of this project through the ownership of CCI shares, warrants and our project royalties."

Terms of the asset purchase agreement

• An initial instalment of $300,000 in cash has been paid by CCI to Metalquest Mining.
• A final instalment of $1-million will be paid within 31 days of the initiation of commercial production from a mine located on the mining asset.
• Metalquest Mining has been issued 2.5 million CCI units. There will be a hold period of four months and a day from the date of issuance after which, 25 per cent of the total units shall be released to Metalquest Mining every three months (a quarter), resulting in 100 per cent of the units being released to Metalquest Mining after four quarters from the conclusion of the initial hold period, each unit consisting of one common share priced using a 30-day volume-weighted average price (VWAP) ended on the date immediately prior to the signing of the asset purchase agreement (deemed price) and one non-transferable warrant of CCI, with each warrant exercisable for five years from the date of issuance at an exercise price that is 150 per cent of the deemed price.
• CCI has granted Metalquest Mining a net smelter returns (NSR) royalty of 0.33 per cent on the mining asset, provided that 50 per cent of such NSR may be repurchased by CCI at its sole discretion for $1-million at any time.

About Metalquest Mining Inc.

Metalquest Mining owns 100 per cent of Otelnuk and is further looking to develop one of the largest iron ore projects in North America. The Lac Otelnuk iron ore project is located in Quebec's Labrador Trough and is approximately 165 kilometres by air northwest of the village of Schefferville, and 1,200 km northeast of Montreal by air. Given the size and scope of the Lac Otelnuk project, management of Metalquest is working with a Toronto-based engineering company familiar with the project to create a go-forward development plan. The Quebec government has recently transferred the claims into Metalquest's name and management is accumulating a vast amount of technical data as approximately $150-million has been expended on the project to date. Going forward, one of the company's primary objectives will be to work with Wasayao Strategy Group, a Quebec-based first nations consulting firm, that will work with Metalquest to secure a memorandum of understanding (MOU) with local first nations and other stakeholders. Management is continuing to develop its in-house iron ore database to enable the company to secure an option/joint venture partner from the iron ore industry.

The company owns 2.5 million units of Canadian Copper Inc. and two NSR royalties totalling 1 per cent in the Murray Brook PEA-stage zinc-polymetallic deposit, situated in the famous Bathurst mining district, New Brunswick, Eastern Canada. Canadian Copper has the right to purchase half of a 0.33-per-cent royalty for $1-million and must pay Metalquest Mining a preproduction cash payment of $1-million after the project goes into production.

We seek Safe Harbor.