SALAZAR RESOURCES LIMITED (TSX-V: SRL) (OTCQX: SRLZF) (FSE: CCG.F) is pleased to announce it has entered into a mining option and shareholders’ agreement with Minera Mesaloma S.A. and other arm’s length parties, and Santos Resources Ltd. pursuant to which Salazar Resources has the option to acquire, indirectly by way of the acquisition of shares of Canco, of up to 100% of the Los Santos gold project (comprised of the 2,215 hectare Los Santos 2.1 concession), located in southwest Ecuador, adjacent to the Cangrejos deposits and approximately 10 km northeast of the Company’s Los Osos project . The signing of the letter of intent in respect of the transaction, and the terms of the transaction, were previously announced by Salazar Resources on December 10, 2020.

The Transaction

Pursuant to the Option, Salazar Resources can earn up to 100% of the Property by paying the total sum of US$1,950,000 in instalments, with a committed first instalment of US$150,000  due on or before the date which is 12 months after the later of: (a) June 17, 2021; or (b) the date on which the “Certificado de No Afectacion” permit has been granted by the Ministry of Environment of Ecuador in respect of the Property. Salazar Resources, upon making the First Option Exercise Payment to the Optionor, would earn a 26% participating interest in Canco and thereby a corresponding beneficial interest in the Property.

Under the terms of the Definitive Agreement, Salazar Resources must pay, over the course of 4 years from the date of the First Option Exercise Payment, additional sums totaling US$1,800,000 to the Optionor to exercise the Option to acquire a 90% participating interest in Canco. In the event that the Definitive Agreement is terminated for any reason prior to Salazar Resources acquiring a 90% participating interest in Canco, Salazar Resources is to transfer its interest in Canco to the Optionor and assign all of its shareholder loans to the Optionor, for a purchase price of US$1.

On Salazar Resources having earned a 90% interest in the Property, Salazar Resources has the option to purchase the remaining 10% of the property for US$2,000,000 plus a 1.5% NSR royalty, which is subject to a buy-back provision. Payments under each 0.5% NSR royalty shall be capped at US$4,500,000 when paid out from production. After Salazar Resources has taken the Property to production, both Salazar Resources and the Optionor will thereafter fund the project on a pro-rata basis.

The Optionor can choose to receive option exercise payments in cash or in units of the Company, with each Unit being comprised of a) one common share of the Company issued at a price calculated based on a 7.5% discount on the 5 day volume weighted average price of the Company’s common shares on the TSX Venture Exchange, subject to a minimum price of Cdn$0.23, plus b) one-half of one share purchase warrant, with each Warrant entitling the holder to purchase one common share of the Company for a period of 18 months an exercise price equal to the greater of Cdn$0.305 and the market price at the time of issuance of the Warrants.

Salazar Resources has the option of accelerating the option payment schedule by paying a premium on the remaining option payments.

About Salazar Resources

Salazar Resources is focused on creating value and positive change through discovery, exploration and development in Ecuador. The team has an unrivalled understanding of the geology in-country, and has played an integral role in the discovery of many of the major projects in Ecuador, including the two newest operating gold and copper mines.

Salazar Resources has a wholly-owned pipeline of copper-gold exploration projects across Ecuador with a strategy to make another commercial discovery and farm-out non-core assets. The Company actively engages with Ecuadorian communities and together with the Salazar family it co-founded The Salazar Foundation, an independent non-profit organisation dedicated to sustainable progress through economic development.

The Company already has carried interests in three projects. At its maiden discovery, Curipamba, Salazar Resources has a 25% stake fully carried through to production. A feasibility study for initial open-pit development announced in October 2021 generated a base case NPV(8%) of US$259 million (for further information, please refer to the Company’s news release dated October 26, 2021). At two copper-gold porphyry projects, Pijili and Santiago, the Company has a 20% stake fully carried through to a construction decision.