Mr. Stephen Balch reports

SPRUCE RIDGE RESOURCES LTD. ANNOUNCES AGREEMENT WITH RAB CAPITAL HOLDINGS TO ACQUIRE NICKEL ASSETS IN OREGON

Spruce Ridge Resources Ltd. has entered into a share purchase agreement with RAB Capital Holdings Ltd., an arm's-length party of the company, dated Nov. 10, 2023, for the acquisition of all the issued and outstanding securities of RFN Holdings Ltd. RFN is the holder of an 80-per-cent interest in Homeland Nickel Corp. (HLN), which holds a portfolio of mining claims in Oregon that comprise the Red Flat property and the Cleopatra property, as well as an interest in some secondary deposits in the vicinity of the properties.

Steve Balch, interim president and chief executive officer, stated: "Spruce is poised to enter the U.S. critical minerals market with two important properties containing significant resources of nickel, with further expansion potential. We have now signed the definitive agreement to complete the acquisition. Together, Cleopatra and Red Flat have resources equivalent to over one billion pounds of nickel."

Cleopatra and Red Flat are nickel laterites with resources identified in soil and rock. The most recent work included unpublished National Instrument 43-101 reports ("Evaluation of the Cleopatra Ni/Co [nickel/cobalt] Property Mining Potential, Curry County, Oregon, U.S.," A.J. Rancourt, 2009, and "Evaluation of the Red Flat Ni/Co Property Mining Potential, Curry Country, Oregon, U.S.," Mr. Rancourt, 2009) which identified total inferred resources at Cleopatra of 39.5 Mt (million tonnes) grading 0.93 per cent Ni and at Red Flat of 18.8 Mt grading 0.84 per cent Ni, both using a 0.7 per cent Ni cut-off. While the resources were described as total inferred, resources were classified in the measured, indicated and inferred categories for both properties. Additional mineralization is known to occur at depth at a lower grade. Total tonnage could also increase substantially by using a lower cut-off grade. The properties are road accessible. Cobalt is also present.

The historical resources are considered reliable, as they were based on a substantial base of previous work with updated confirmation drilling, trenching and assaying. Neither report included the assay certificates from the follow-up work. These certificates have since been obtained as part of an updated technical review that is now complete, including a property visit by an independent geologist.

A qualified person has not done sufficient work to classify the historical estimate as current mineral resources or mineral reserves, and the company is not treating the historical estimate as current mineral resources or mineral reserves. While the company is confident in the historical work, until such time as the technical due diligence has been completed, it is not treating the historical resources as current mineral resources. Future work would then be focused on upgrading the inferred resources to measured and indicated, as well as expanding the resources by tonnage, as both resources are open at depth.

Cleopatra and Red Flat nickel laterite deposits

Nickel mineralization was discovered in southwest Oregon in the 1930s with significant exploration occurring in the 1950s, including auger-hole drilling and assaying. This led to the identification of surface resources of nickel-bearing laterite at both Cleopatra and Red Flat.

Nickel laterite is formed by the surface alteration of olivine-rich ultramafic rocks, most commonly peridotite. Nickel is concentrated in place within the upper 10 metres of the soil, but also within enriched rocks that form within and below the soil line. Below the enriched rock, mineralized peridotite (sometimes serpentinized) is also present. The average depth of exploration at either property is currently less than 15 metres.

Transaction terms

Pursuant to the terms of the agreement, Spruce will acquire a 100-per-cent interest in RFN, with RFN being the holder of an 80-per-cent interest in HLN, by:

• Making a $50,000 cash payment to RAB Capital, which has already been completed, primarily for the reimbursement of costs incurred by RAB Capital prior to entering the agreement;
• Transferring to RAB Capital two million common shares in the capital of Canada Nickel Company Inc. (CNC) held by Spruce, as follows:
  • 500,000 CNC shares upon closing of the transaction;
  • 1.5 million CNC shares upon the earlier of: (i) completion of the concurrent financing (as defined below); or (ii) 90 days from the closing of the transaction.
• Paying $450,000, to be settled against RAB Capital's subscription for an aggregate $450,000 in the concurrent financing (as defined below);
• Issuing to RAB Capital an aggregate of 10 million common shares in the capital of Spruce upon closing of the transaction;
• Granting to RAB Capital a 2-per-cent net smelter returns (NSR) on the properties and the deposits, with an option to repurchase 50 per cent of each NSR for $2-million;
• Reimbursing RAB Capital a total of $37,957 (U.S.) for the cost of tenement renewals on the properties paid for the year 2023/2024;
• Reimbursing RAB Capital a total of $22,500 (U.S.) for the cost of preparation of audited financial statements;
• Assuming a pre-existing intercorporate loan between RAB Capital and HLN totalling approximately $36.74-million (U.S.);
• Paying funds to RAB Capital upon reaching certain milestones, as follows:
  • $1-million cash payment upon filing a technical report on one or both of the properties where a nickel resource is re-evaluated (or restated) to a standard in accordance with the requirements of National Instrument 43-101 -- Standards of Disclosure for Mineral Properties;
  • $2-million cash payment upon completion of an NI 43-101 preliminary economic assessment on one or both of the properties;
  • $2-million cash payment upon completion of an NI 43-101 feasibility study on one or both of the properties;
  • $10-million cash payment upon announcement of a decision to commence construction on one or both of the properties.

In addition to transferring its interest in RFN to Spruce, RAB Capital will subscribe for an aggregate $450,000 in an upcoming non-brokered private placement of Spruce. The concurrent financing will comprise the sale of up to 30 million units, to be sold at five cents per unit for gross proceeds of $1.5-million. Each unit will consist of one common share and one-half of one common share purchase warrant. Each whole common share purchase warrant will entitle the holder to acquire one common share for 10 cents for a period of two years after the closing of the concurrent financing. All securities issued in conjunction with the concurrent financing will be subject to a hold period of four months and one day after closing.

The company reserves the right to increase the size of the concurrent financing by up to 10 per cent, to a maximum of 33 million units for gross proceeds of $1.65-million. The concurrent financing is integral to the transaction to permit the company to pay the purchase price, reimburse RAB Capital the costs of tenement renewals and preparation of financial statements, and to finance the first milestone payment in the event the milestone is achieved. Proceeds from the concurrent financing will be used to pay the purchase price of the transaction, to finance exploration on the properties, finance milestone payments pursuant to the agreement and for general corporate purposes.

Closing of the transaction and the concurrent offering is subject to approval by the TSX Venture Exchange. The transaction is considered a fundamental acquisition under TSX-V policies and, accordingly, trading in the company's shares has been halted until the earlier of satisfactory review of the transaction by the TSX-V or closing of the transaction.

Mr. Balch, PGeo, the company's interim president and chief executive officer, a qualified person under National Instrument 43-101, has reviewed and approved the technical contents of this press release.

We seek Safe Harbor.