Mr. Kelly Abbott reports

PEGMATITE ONE ANNOUNCES OPTION AGREEMENT WITH ASX LISTED VALOR RESOURCES AND AMENDMENTS TO EXISTING OPTION AGREEMENTS

Pegmatite One Lithium and Gold Corp. has entered into an agreement dated Dec. 4, 2023, with Valor Resources Ltd., an arm's-length party, listed on the Australian Securities Exchange. The agreement grants Valor the right to acquire a 100-per-cent interest (subject to existing net smelter returns) in the company's Frazer Lake project and Morrison River project for a total of $400,000 (Australian) cash (or 100 million ordinary shares in the capital of Valor at a deemed issue price of 0.4 cent per Valor share, at Valor's election) and 1.25 billion Valor shares.

Valor details

Valor is an ASX-listed, Australia-based exploration company with a focus on uranium and rare earths projects in Canada. Valor's Canadian portfolio includes:

1. Hook Lake uranium project: Valor has the right to earn an 80-per-cent working interest in this project, located about 60 kilometres east of the Key Lake uranium mine in Northern Saskatchewan. The project spans over 25,846 hectares and includes 16 contiguous mineral claims with several prospective areas for uranium mineralization.
2. Cluff Lake uranium project: This project is situated seven kilometres east of the Cluff Lake uranium mine and consists of 19 contiguous mineral claims covering approximately 57,499 hectares. Valor has a 100-per-cent interest in this project.
3. Additional projects in the Athabasca basin: Valor holds a 100-per-cent interest in six additional projects within the Athabasca basin, covering over 16,897 hectares. These include the Hidden Bay project, Surprise Creek project, Pendleton Lake project, Beatty River project, Smitty project and Lorado project.

Management commentary

Kelly Abbott, chief executive officer of Pegmatite One, expressed his enthusiasm, stating, "As we embark on this transformative journey with Valor Resources, we are not only advancing our strategic goals but also ensuring significant value creation for our shareholders." Mr. Abbott continued: "The acquisition of our projects by Valor marks a new chapter in our story. It represents a synergy of exploration excellence and shareholder interests. Our confidence in this venture is reflected in our decision to reward our shareholders, who are the bedrock of our success. Together, we are poised to explore the untapped potential of our lithium projects and contribute to the sustainable energy landscape."

The company intends to further pursue further exploration of its British Columbia property, Georgina. The Georgina property consists of one mineral claim covering 2,069 hectares.

Transaction details

Morrison property

Pursuant to the agreement, Valor may acquire a 100-per-cent interest (subject to existing net smelter returns) in the Morrison property, which is a non-binding obligation of the parties, by Valor paying the company a total of $80,000 (Australian) cash (or 20 million ordinary shares in the capital of Valor at a deemed issue price of 0.4 cent per Valor share, at Valor's election) and 250 million Valor shares, as follows:

• $20,000 (Australian) cash or five million Valor shares, at Valor's election, on the earlier of:
  • Upon execution of a definitive agreement (the formal agreement) between the parties relating to the Morrison property;
  • Dec. 31, 2023, provided the company has completed its due diligence on Valor, which date is extended until the date that the company has completed its due diligence on Valor.
• $30,000 (Australian) cash or 7.5 million Valor shares, at Valor's election, on the earlier of:
  • Upon commencement of on-ground field-based exploration activities;
  • June 1, 2024.
• $30,000 (Australian) cash or 7.5 million Valor shares, at Valor's election, on or before the third-month anniversary from commencement of on-ground field-based exploration activities;
• On or before Sept. 30, 2024, 250 million Valor shares, if Valor elects to proceed with the acquisition of 100-per-cent interest (subject to existing net smelter returns) in the Morrison property.

Frazer property

Pursuant to the agreement, Valor may acquire a 100-per-cent interest (subject to existing net smelter returns) in the Frazer property, which is a binding obligation of the parties, by Valor paying the company a total of $320,000 (Australian) cash (or 80 million Valor Shares, at Valor's election) and one billion Valor shares, as follows:

• $80,000 (Australian) cash or 20 million Valor shares, at Valor's election, on the earlier of:
  • Upon execution of a formal agreement between the parties relating to the Frazer property;
  • Dec. 31, 2023, provided the company has completed its due diligence on Valor, which date is extended until the date that the company has completed its due diligence on Valor.
• $120,000 (Australian) cash or 30 million Valor shares, at Valor's election, on the earlier of:
  • Upon commencement of on-ground field-based exploration activities;
  • June 1, 2024.
• $120,000 (Australian) cash or 30 million Valor shares, at Valor's election, on or before the third-month anniversary from commencement of on-ground field-based exploration activities.
• On or before Sept. 30, 2024, one billion Valor shares, if Valor elects to proceed with the acquisition of 100-per-cent interest (subject to existing net smelter returns) in the Frazer property.

The cash and share payments to be made by Valor for the Frazer property are firm commitments and must be made even in the event that Valor terminates the agreement and chooses not to exercise the option for the Frazer property, except in certain circumstances.

The agreement contains, and the formal agreements will contain, customary representations, warranties and covenants for transactions of this type, including a termination fee up to $500,000 (Australian) in the event that the transaction is terminated as a result of a breach of the non-solicitation covenants and up to $250,000 (Australian) in the event of breach of representations and warranties. The agreement also provides for a non-solicitation covenant and a provision for the right for each party to match any superior proposal for a period of 10 business days.

The transaction is subject to, among other things, the approval of Pegmatite One shareholders, if required, receipt of required regulatory approvals and other customary conditions of closing.

Amendments to existing option agreement

First option agreement

Pegmatite One is pleased to announce it has entered into an amending agreement to amend the option agreement previously announced by the company on June 28, 2023, to reduce the consideration to be paid upon exercise of the first option agreement and extend the deadline for the consideration to paid. Pursuant to the first amending agreement, in order for the company to exercise its option in the first option agreement, it will now be required to pay:

1. $25,000 (previously $250,000) on or before Aug. 8, 2026 (previously June 28, 2024);
2. Issue 2,000,000 common shares of the company (previously 20 million shares) on or before Aug. 8, 2026 (previously June 28, 2024).

Second option agreement

Pegmatite One is pleased to announce it has entered into a second amending agreement to amend the option agreement previously announced by the company on Aug. 10, 2023, as previously amended to reduce the consideration to be paid upon exercise of the second option agreement and amend the deadline for the consideration to paid. Pursuant to the second amending agreement, in order for the company to exercise its option in the second option agreement, it will now be required to pay:

1. $25,000 (previously $1-million) on or before Aug. 8, 2026 (previously Aug. 14, 2024);
2. Issue 3.2 million shares (previously 32 million shares) on or before Aug. 8, 2026 (previously Aug. 14, 2024).

About Pegmatite One Lithium and Gold Corp.

Pegmatite One is a publicly traded company exploring for lithium and gold. The company is committed to responsible mining practices and operates two mineral exploration properties in Northwestern Ontario and a third mineral exploration property on Vancouver Island.

We seek Safe Harbor.