Blue Moon Metals Inc.  (TSX-V: MOON) (OTCQB: BMOOF), Nussir ASA and Nye Sulitjelma Gruver AS are pleased to announce that the parties have entered into separate binding letters of intent each dated November 27, 2024, pursuant to which Blue Moon has agreed to acquire all of the issued and outstanding common shares of Nussir and NSG. Both Nussir and NSG are private Norwegian companies with properties in northern Norway. Blue Moon is acquiring a 100% interest in Nussir for US$55.3M and a 100% interest in NSG for US$12M, both to be satisfied in common shares of Blue Moon at a deemed price of C$0.30 per Blue Moon Share, which will be the same price per Subscription Receipt (as defined below) in the Concurrent Equity Financing. NSG shareholders will also receive US$3M in cash milestone payments related to permitting for tailings discharge followed by receipt of the operating permit for the NSG Property.

Blue Moon will also complete a brokered private placement in tandem with the Nussir Transaction and the NSG Transaction at the Blue Moon Deal Price. A maximum US$35.7M of new equity is being raised with the set minimum of US$21.4M by top tier global mining investors. More details on the Concurrent Equity Financing can be found below. Definitive agreements covering the Nussir Transaction and NSG Transaction will be executed at or prior to closing of the Concurrent Equity Financing. The implied equity value of the Transactions is approximately US$100 – $115 million on a fully-diluted in-the-money basis, with the range based on the low and high end of the Concurrent Equity Financing. At closing, existing Blue Moon, Nussir and NSG shareholders will own a minimum of 12%, 55% and 12%, respectively, of Blue Moon Shares outstanding on a fully-diluted in-the-money basis, assuming the low end of the Concurrent Equity Financing, or 10%, 48% and 10%, respectively, assuming the maximum proceeds are raised in the Concurrent Equity Financing. Some existing Blue Moon and Nussir shareholders will participate in the Concurrent Equity Financing and no one shareholder will own more than 20% of Blue Moon under any Concurrent Equity Financing scenario at closing. The transaction is subject to final acceptance by the TSX Venture Exchange, as the Transactions are considered a “Reviewable Transaction” under the policies of the TSXV. As per TSXV requirements, trading of the Blue Moon Shares is halted and will remain halted until receipt of TSXV’s approval of the Transactions, which is expected when a NI 43-101 technical report will be issued to Blue Moon on the Nussir Property, among other customary items.  No vote of Blue Moon shareholders is anticipated, and closing is expected by the end of February 2025. Nussir shareholders are required to achieve 90.1% shareholder support, which is expected to be received by the time the Concurrent Equity Financing closes. NSG has shareholder approval from 100% of their shareholders. Nussir and NSG are arm’s length parties to each other, and Blue Moon is an arm’s length party to both of them. No finder’s fees are being paid in connection with the Transactions, other than the fees payable to the Agents (as described below) in connection with the Concurrent Equity Financing.

Strategic Rationale for Blue Moon

• Provides immediate asset and geographic diversification with more emphasis on near term copper:
  • Tier 1 jurisdiction covering all 3 projects; the United States and Norway are members of the Minerals Security Partnership (MSP), a US collaboration initiative that aims to secure the supply of critical raw materials including copper and zinc
• Addition of the low-cost brownfield Nussir Property copper-silver-gold mine is expected to significantly enhance Blue Moon’s developing production profile:
  • The Nussir Property is an underground development project with existing critical infrastructure located next to property (access, power, port, etc.). Open pit historical production was suspended in the 1970s. The construction of a decline is expected to begin in Q1-2025
  • Exploration ramp access is expected to start construction at both the Blue Moon property (the “Blue Moon Property“) and the NSG Property in 2025 or 2026. Production last occurred in the 1940s at the Blue Moon Property and in the early 1990s at the NSG Property
• Existing Mineral Resources of:
  • Nussir Property^{(1) (2)}
    • Historical estimate of measured resources of 1.7 Mt at 1.16% Cu, 0.22 g/t Au and 13.3 g/t Ag and indicated resources of 31.8 Mt at 1.09% Cu, 0.13 g/t Au and 12.6 g/t Ag
    • Historical estimate of inferred resources of 33.4 Mt at 1.16% Cu, 0.17 g/t Au and 16 g/t Ag
  • Blue Moon Property⁽³⁾
    • Indicated resources of 3.51 MT at 6.14% Zn, 0.75% Cu, 1.54 oz/T Ag, 0.05 oz/T Au and 0.24% Pb
    • Inferred resources of 3.83 MT at 5.94% Zn, 0.59% Cu, 1.54 oz/T Ag, 0.05 oz/T Au and 0.34% Pb
  • NSG Property⁽¹⁾⁽⁴⁾
    • Historical inferred resources of 29.4 Mt at 0.9% Cu and 0.17% Zn. Gold, silver and sulfur were not assayed for, but are expected to form a credit in the future
• All 3 projects have the potential to materially increase in size prior to a final mill construction decision:
  • At the Nussir Property, Blue Moon is expecting to focus the next 18-months on 6 different opportunities aimed at increasing both shear-hosted and sediment hosted resources through primarily drilling from underground. Underground exploration potential is considered to be high
  • At the Blue Moon Property, post maiden preliminary economic assessment release, expected in Q1-2025 (see October 10, 2024 press release), Blue Moon expects to focus on drilling off the existing volcanic massive sulphide resources with the aim of upgrading to reserve status from underground, and extending the deposit down dip. Underground exploration potential is considered to be high
  • At the NSG Property, regional exploration activities through underground tunnels will aim to expand on the significant production history at multiple volcanic massive deposits between 1887 and 1991
  • Limited exploration dollars have been spent on all 3 projects for decades, and Nussir and NSG have never been exposed to the public markets
• The metallurgical response to simple flotation at both the Nussir Property and the Blue Moon Property is expected to be very positive
• Available infrastructure  at all 3 projects with access to power, water, ports and underground infrastructure
• Blue Moon would anticipate that production decisions could be made once all 3 projects have substantially tested their exploration potential, from underground drilling, test mining, mineral sorting and by-product credit market analysis.
• Negligible royalties exist at Blue Moon, and 0.75% NSRs on both the Nussir Property and NSG Property, and no streams nor off-takes have been sold on any of the 3 projects. Precious metals are expected to contribute over 20% to the NSR of both the Nussir Property and the Blue Moon Property
• Re-rating opportunity is expected to result from increased scale, significantly enhanced growth profile and establishing a presence in an emerging, mining-friendly jurisdiction. Key personnel from the principals of Blue Moon will aim to build up a high-quality team to advance these projects and to become a significant base metals mining company

Blue Moon’s CEO, Christian Kargl-Simard, said:

“This transaction will create a new copper-zinc development company located in Tier 1 jurisdictions, focused on critical metals for the western world. It presents the opportunity for us to leverage our technical expertise and strong access to capital markets to unlock value for all shareholders by advancing and developing multiple base metals projects. In a world where geopolitics and national security are front page topics in sourcing critical materials, we believe our foray into Europe and the United States is well timed. We plan on deploying the best available technologies on our projects and showing strong support for our communities and partner. First off though, it’s time to show off results from the drill bit.”

About the Nussir Property

Nussir is a privately held mining company incorporated under the laws of Norway, established in 2005. Its aim is to develop the Nussir Property copper-silver-gold mine located in northern Norway. Former open pit mining occurred at the mine during the 1970s in 4 shear-hosted open pits. Nussir has been focused on advancing a sedimentary hosted copper deposit on the same project with analysis, study work and permits granted over a 20-year period. SRK Consulting (UK) Limited completed an updated JORC-compliant feasibility study on the construction ready project in May 2023 with an initial capital cost estimated at US$101 million.

Historical estimate of JORC-compliant resources exist as follows (SRK DFS Report dated May 2023): ⁽¹⁾⁽²⁾

• Measured resources of 1.7 Mt at 1.16% Cu, 0.22 g/t Au and 13.3 g/t Ag
• Indicated resources of 31.8 Mt at 1.09% Cu, 0.13 g/t Au and 12.6 g/t Ag
• Inferred resources of: 33.4 Mt at 1.16% Cu, 0.17 g/t Au and 16 g/t Ag
• High potential to increase global resources through:
  • Upgrading undrilled areas of the ~10 km resource trend and infilling high-grade resource (+2% CuEq) areas that have seen limited drill density
  • Defining the parallel zone at the Nussir Property, which does not currently have any resources, and could have meaningful strike length
  • Drilling underneath the historical open pit production through the existing 2.5 km underground tunnel, and expanding resources that are open
  • Drilling a geochemical anomaly between the historical open pits and the Nussir Property
• Groundbreaking ore sorting technology is being tested which could provide major reduction in waste, increase processing capacity and lower operating costs
• Blue Moon will be investigating all of these opportunities. With substantial drilling from the underground decline and test mining different options for tailings deposition will be investigated prior to completing a feasibility study and making a full construction decision. This work is projected to be the bulk of the use of proceeds from the Concurrent Equity Financing.

About the NSG Property

Blue Moon is excited about the copper potential of northern Norway, and the NSG Property would be the first new copper mine in the country in over 50 years. The NSG Property has some of the most attractive rocks in the country from a historical perspective, with the area at the NSG Property having hosted the largest mining operation in the country. The remaining deposits still constitute among the largest known deposit of copper in Norway and are expected to contain significant exploration upside. No resources exist as compliant with National Instrument 43-101 – Standards of Disclosure for Mineral Projects, but the NSG Property has a historical estimate of inferred resources of: 29.4 Mt at 0.9% Cu and 0.17% Zn. Precious metals and sulfur have not been assayed but are expected to become a credit. ⁽¹⁾⁽⁴⁾

Concurrent Equity Financing

The Concurrent Equity Financing will be conducted by way of a brokered private placement of a minimum of 10,000,000 units and a maximum of 16,666,667 units of Blue Moon at a price of C$3.00 per Unit for minimum gross proceeds of C$30,000,000 and maximum gross proceeds of C$50,000,000, co-led by Cormark Securities Inc. and Scotia Capital Inc. on behalf of a syndicate of investment dealers

Each Unit issued in the Concurrent Equity Financing will consist of 1 common share of Blue Moon and 9 subscription receipts, with 10% of the price per Unit allocated to the Unit Share underlying each Unit and 90% of the price per Unit allocated to the Subscription Receipts underlying each Unit. The proceeds allocated to the Unit Shares will be released to Blue Moon upon closing of the Concurrent Equity Financing, and will not be returned to the subscribers in the event the Escrow Release Conditions (as defined below), which include the completion of the Nussir Transaction, are not met.

Upon completion of the Nussir Transaction, and subject to certain customary conversion conditions for a transaction of this nature, each Subscription Receipt will convert into one common share of Blue Moon without payment of additional consideration or further action on the part of the holder.

Blue Moon has agreed to pay to the Agents a commission equal to 6.0% of the gross proceeds from the Concurrent Equity Financing, 50% of which will be placed in escrow as described below. A President’s List will also be part of the Concurrent Equity Financing with varying commissions depending on the potential subscriber, but none higher than 6.0%.

The proceeds of the Concurrent Equity Financing, other than those proceeds allocated to the Unit Shares, and the Escrowed Commission, will be held in escrow pending satisfaction of the Escrow Release Conditions. Provided that the Escrow Release Conditions are satisfied or waived (where permitted) prior to 5:00 p.m. (Toronto time) on February 27, 2025, or prior to April 30, 2025 if Blue Moon shareholder approval is required by the TSXV, the Escrowed Commission will be released to the Agents from the Escrowed Proceeds, the balance of the Escrowed Proceeds will be released to or as directed by Blue Moon, and the Subscription Receipts shall be automatically converted into Underlying Shares, without payment of any additional consideration or further action on the part of the subscribers. In the event that the Escrow Release Conditions are not satisfied by the Escrow Release Deadline, the Escrowed Proceeds, together with interest earned thereon, will be returned to the holders of the Subscription Receipts and such Subscription Receipts will be cancelled.

The proceeds from the Unit Shares will be immediately released to Blue Moon to be used for general corporate purposes and advancement of the Blue Moon project, along with costs related to the Transactions. The proceeds from the Subscription Receipts will be primarily utilized for exploration decline development, underground exploration, and optimization studies at the Nussir Property, exploration permitting at the Blue Moon Property and the NSG Property, and general corporate purposes and working capital.

The securities issued under the Concurrent Equity Financing will be subject to a statutory four-month hold period under applicable securities laws. Completion of the Concurrent Equity Financing does not provide a guarantee that the Transactions will be completed. The Concurrent Equity Financing must be closed by January 15^th and the overall Transactions closed by February 27, 2025, as outside dates, unless extended by mutual agreement of the parties. Blue Moon intends to list on the Oslo Stock Exchange after closing of the Transactions.

Conditions Precedent

The closing of the Nussir Transaction is conditional on closing of the NSG Transaction and the conversion of Subscription Receipts is conditional on the Transactions closing. The closing of the NSG Transaction is conditional on the closing of the Nussir Transaction. Both Nussir and NSG are being acquired on a debt-free basis. The boards of directors of all 3 companies have unanimously approved the Transaction.

The board of directors of the resulting issuer shall include 3 existing directors of Blue Moon (Christian Kargl-Simard, Maryse Bélanger and Haytham Hodaly), two nominated by Nussir, being Francis Johnstone and Karin Thorburn, with one nominee of NSG to be nominated at the next scheduled shareholder meeting. Senior Officers of the resulting issuer will be Christian Kargl-Simard as Chief Executive Officer and Frances Kwong as Chief Financial Officer, with additional officers to be announced in due course.

The existing JORC-compliant feasibility study on the Nussir Property will be restated and/or reconciled to be compliant with NI 43-101 prior to closing. A NI 43-101 compliant report on the NSG Property is also being prepared, but no determination has been made by the TSXV whether such a report will or will not be required for completion of the Transactions at this time.

The following is the minimum escrow release policy for Blue Moon Shares to be issued to Nussir shareholders on closing of the Nussir Transaction: 50% release after 6 months and a following 50% release after 12 months. The following is the minimum escrow release policy for Blue Moon Shares to be issued to NSG shareholders on closing of the NSG Transaction: 50% release after 6 months and a following 50% release after 12 months. All securities issued under the Transactions may be subject to additional escrow requirements as determined by the TSXV.

In addition to the required 90.1% Nussir shareholder approval, the Transaction is also subject to the satisfaction of certain other closing conditions customary for a transaction of this nature. The Transaction remains subject to Exchange approval in all respects on behalf of Blue Moon. The Transaction is expected to be completed by the end of February 2025. Blue Moon Shares will remain halted for trading until closing of the Transaction.

The definitive agreements for the Nussir Transaction and the NSG Transaction, which will be signed upon closing of the Concurrent Equity Financing, will include representations, warranties, covenants, indemnities, termination rights and other provisions customary for a transaction of this nature. In particular, the Definitive Agreements will provide for customary deal protections, including non-solicitation covenants on the parties and a right of the other party to match any Superior Proposal (as defined in the Definitive Agreements). The Definitive Agreements will include a termination fee payable by the parties, under certain circumstances (including if the Definitive Agreements are terminated in connection with such parties pursuing superior proposals).

Advisors and Counsel

DLA Piper (Canada) LLP and Simonsen Vogt Wiig AS are acting as Blue Moon’s Canadian and Norwegian legal advisors, respectively.

CIBC Capital Markets is acting as financial advisor to Nussir. Fasken Martineau LLP and Arntzen de Besche are acting as Nussir’ Canadian and Norwegian legal advisors, respectively.

Qualified Persons

Dustin Small, P. Eng., qualified person under NI 43-101, has approved the scientific and technical information related to the operations matters contained in this news release.

Notes:

About Blue Moon

Blue Moon Metals is advancing its Blue Moon polymetallic deposit which contains zinc, gold, silver and copper. The property is well located with existing local infrastructure including paved highways three miles from site; a hydroelectric power generation facility a few miles from the site, a three-hour drive to the Oakland port and a four-hour drive to the service center of Reno. Zinc and copper are currently on the USGS list of metals critical to the US economy and national security.