Caravan Energy to Acquire Rare Earth Properties in British Columbia

Pursuant to an agreement with the vendors thereof, the Company has agreed to acquire‎ 24 mineral claims in consideration for $100,000 in cash, 4,363,636 common shares (each, a “Consideration Share“) of the Company, and the grant of a 2% net smelter returns (“NSR“) royalty (subject to the Company’s right to buy-back 50% of the NSR royalty for $1,000,000). The Consideration Shares will be subject to a four month and one day hold period pursuant to applicable securities laws and will also be subject to a voluntary leak out schedule whereby they will be released over a 36-month period from the date of closing.

Pursuant a separate agreement with the separate vendors thereof, the Company has agreed to acquire three mineral claims in consideration for $100,000 in cash, 1,045,454 Consideration Shares, and the grant of a 2% NSR royalty (subject to the Company’s right to buy-back 50% of the NSR royalty for $500,000). $50,000 of the cash consideration is to be paid upon Closing‎ and the remaining $50,000 ‎is to be paid on or before January 31, 2024‎. The Consideration Shares will be subject to a four month and one day hold period pursuant to applicable securities laws and will also be subject to a voluntary leak out schedule whereby they will be released over a 30-month period from the date of Closing.

The Consideration Shares will be issued at a deemed value of $0.52 per share, being the closing price of the Company’s common shares on September 11, 2023.

All the vendors are arm’s length the Company, and the Closing of the Acquisition is subject to customary closing conditions.

The TREO Property is situated adjacent to the north, east, and south of the Wicheeda rare-earths property of  Defense Metals Corp. (TSX-V: DEFN) (“Defense Metals“), in respect of which  Defense Metals has commenced Pre-Feasibility Study work.¹

The Company has agreed to pay, upon completion of the Acquisition, a finder’s fee of 579,371 common shares (the “Finder’s Fee Shares“), being equal to 10% of the total consideration value paid pursuant to the Acquisition, to an arm’s length party. The Finder’s Fee Shares will be subject to a four month and one day hold period pursuant to ‎applicable securities laws‎.

About Caravan Energy

The Company is a mineral exploration company based in Vancouver, BC and holds options over the EBB Nickel-Cobalt Property located in British Columbia, Canada.