Mr. Andrew Dinning reports

SARAMA RESOURCES ADVANCES MT VENN GOLD PROJECT ACQUISITION

Sarama Resources Ltd. has reached a binding agreement with Orbminco Ltd., an arm's-length third party, to acquire a majority and controlling interest in the underexplored, belt-scale 420-square-kilometre Mt. Venn project, located in the Eastern Goldfields of Western Australia.

This follows Sarama's recent acquisition of a majority interest in the nearby Cosmo project (refer to Sarama news release Dec. 6, 2024). Together the projects create a 1,000-square-kilometre well positioned and underexplored landholding in the Laverton gold district which is known for its prolific gold endowment and recent discoveries.

Sarama's president and executive chairman, Andrew Dinning, commented:

"We are very pleased to be nearing completion of the acquisition a majority interest in the Mt. Venn project and consolidating our position in the prolific Laverton gold district of Western Australia. The addition of the Mt. Venn project will create a major 1,000 square km area-play and significantly enhances the probability of making the next big discovery in a region that continues to deliver new deposits in previously unexplored areas, including the regionally significant Gruyere deposit just 35 km east of the Mt. Venn project. Soil sampling programs at the Cosmo project are progressing well, feeding into the process of bringing the Cosmo and Mt. Venn projects to account as expeditiously as we can."

Mt. Venn project

The project is comprised of three contiguous exploration tenements covering approximately 420 square km in the Eastern Goldfields of Western Australia, approximately 110 km northeast of Laverton and 35 km west of the regionally -- significant Gruyere gold mine. The project is readily accessible via the Great Central Road which services the regional area east of Laverton.

The project captures the majority of the underexplored Jutson Rocks greenstone belt over a strike length of approximately 50 km. Rocks within the belt feature a diverse sequence of volcanic lithologies of varying composition, together with pyroclastics and metasediments. Several internal intrusive units have been identified throughout the project and are commonly associated with local structural features. A regionally extensive shear zone, spanning one to three km in width, extends the entire length of the belt with subordinate splays interpreted in the southern area of the project which provides a favourable structural setting for mineralization.

Gold mineralization was first discovered in the 1920s with sampling returning very high grades and prompting the commencement of small-scale mining operations in the mid 1920s. Multiple gold occurrences have since been identified throughout the project, demonstrating the prospectivity of the system. Despite the identification of several km scale gold-in-soil anomalies by soil geochemistry and auger drilling, many of these targets are yet to be properly tested. Encouragingly, drilling by Cazaly Resources Ltd. (ASX: CAZ) at the project intersected broad, gold mineralization over several fences in weathered and fresh rock at the Three Bears prospect, presenting a priority target for exploration (Cazaly news release Feb. 27, 2017: "Widespread Gold & Zinc Mineralization Defined").

In addition to the attractiveness of the project for gold, it is considered prospective for base metals and platinum group elements. Historical exploration work including auger geochemistry and geophysical surveys identified numerous targets for copper, nickel and zinc mineralization. Several of these targets remain untested due to historical funding and land access constraints. Exploration in the belt to the immediate south of the project area is noted to have intersected copper mineralization of significant grade over a significant strike length.

In summary, the project is located within a prolific gold district and has a favourable lithological and structural setting. A solid database of base-level historical exploration work by previous operators, including generation of drill-ready targets, provides a good platform for Sarama to advance the project in conjunction with its activities at the Cosmo project. The size and prospectivity of the landholding that Sarama will have in the Laverton gold district upon completion of this transaction significantly enhances the chances of making an economic discovery, particularly given the infrastructure and proliferation of mines in the region which will have a favourable impact on the size threshold for finding something of economic value.

Transaction and joint venture summary

Transaction details

Orbminco's interest in the project is held through the participation of its 100-per-cent-owned subsidiary Yamarna West Pty. Ltd. in an unincorporated joint venture (JV) with Cazaly under which Yamarna is acting as operator/manager of the JV.

The agreement provides for a 100-per-cent-owned subsidiary of Sarama to be assigned (as provided for in the JV agreement) all of Yamarna's rights, entitlements and obligations under the JV (and associated native title access agreement) in return for consideration as set out below. Yamarna's current 80-per-cent interest in the mineral tenements subject to the JV, shall be transferred into the nominee of Sarama at completion of the transaction.

As consideration for the assignment of its interests in the JV, Orbminco, or its nominee, will receive 12 million chess depository instruments (CDIs) in Sarama. Each consideration security issued to Orbminco, or its nominee, in connection with the transaction will rank equally with existing Sarama CDIs and each consideration security will represent a beneficial interest of one common share in Sarama.

Pursuant to the precursor non-binding head of agreement, Orbminco granted Sarama a right of exclusivity in return for a cash payment of $20,000 (Australian). Sarama has also made payments on behalf of Orbminco for annual exploration licence government rental fees totalling approximately $39,900 (Australian) to ensure continuity of tenure for two of the exploration licences subject of the transaction.

The transaction is an arm's-length acquisition which is expected to constitute an expedited acquisition pursuant to TSX Venture Exchange Policy 5.3 -- Acquisitions and Disposition of Non-Cash Assets. No finders' fees will be paid in connection with the completion of the transaction.

Completion of the transaction will be subject to the satisfaction or waiver by Sarama of the following key conditions:

• Receipt of TSX Venture Exchange final acceptance of the transaction and issuance of the consideration securities;
• Receipt of Sarama board and shareholder approval for the issue of the CDIs as consideration for the transaction;
• Complete assignment of all applicable native title access agreements affecting the project;
• Execution of an assignment deed/agreement by Yamarna and Cazaly for Yamarna's interest in the project JV;
• Receipt of government extension/renewal notices covering new annual periods for tenements E38/3150 and E38/3581.

The agreement contains provisions warranties and obligations for Sarama and Orbminco (or their subsidiaries) that are customary for this type of transaction.

Project joint venture structure

The project is currently in exploration phase and is operated by Yamarna as an unincorporated joint venture in which Yamarna and Cazaly hold interests of 80 per cent and 20 per cent, respectively. The JV agreement grants Yamarna exclusive right of access to the project to conduct exploration and feasibility activities. The JV agreement currently covers mineral tenements E38/3111, E38/3150 and E38/3581 for a total area of approximately 418 square km.

At present, Yamarna is responsible for all costs incurred by the JV until the completion of a prefeasibility study on the project (the free carry period). At that point, Cazaly may elect to start contributing its pro rata share of future JV expenditure to maintain its 20-per-cent interest, or alternatively, elect to withdraw from the JV. In the event that Cazaly withdraws, its interest will be transferred to Yamarna and it will be granted a 2-per-cent net smelter return (NSR) royalty on minerals extracted from the project.

Following the end of the free carry period and in the event Cazaly has elected to contribute its pro rata share of project costs, the JV participants will be subject to industry standard "contribute or dilute" provisions in respect of their interests. In the event a JV participant's interest falls below 5 per cent, it will be deemed to have withdrawn from the JV and its interest automatically converted to a 2-per-cent NSR royalty on minerals extracted from the project.

The JV agreement includes customary protections for the participants associated with, but not limited to, surrender of mineral tenements, disposals of JV property and assets, material revisions to approved work programs and budgets, change of operatorship, and decision to mine.

We seek Safe Harbor.