Highlights:
Headwater has entered into a definitive earn-in agreement with Centerra for a subsidiary of Centerra to earn up to a 70% interest in Headwater's Crane Creek project in Idaho;
Up to US$25,000,000 in staged earn-in expenditures: Centerra may elect to earn up to a 60% interest in the Project by funding exploration expenditures of US$25,000,000 and granting Headwater a royalty on the Project;
US$2,500,000 expenditure commitment: Centerra to fund a minimum commitment of US$2,500,000 in exploration expenditures during the first three years of the Agreement;
Carried interest to completion of a PEA: Centerra may earn an additional 10% interest (up to 70%) in the Project by completing a preliminary economic assessment report on the Project; and
The Project is fully permitted for drilling under a Notice of Intent with the Bureau of Land Management ("BLM") and a Plan of Operation with the Idaho Department of Lands.
Caleb Stroup, Headwater's President and CEO, states: "Since becoming a strategic Headwater shareholder last year, Centerra has been an engaged and supportive partner. We are very excited to expand that relationship into a fully aligned exploration partnership on the project level at Crane Creek. Centerra's commitment to a substantial multi-stage earn-in underscores the scale of the opportunity at this project and allows us to properly test what we believe is a large, underexplored epithermal system with high-grade potential at depth as well as near surface bulk-tonnage potential. Centerra brings strong technical expertise and a collaborative approach and we look forward to working with them to unlock the full potential of the project for our shareholders."
Table 1: Principal Structure of the Earn-In Agreement:
Stage
Expenditures (US$)
CenterraInterest (%)
Time for Each Stage
Minimum Commitment
$2,500,000
0%
3 Yearsfrom Execution Date
Stage 1
$10,000,000 1
51% 2
4 Years from Execution Date
Stage 2
+$15,000,000+1% to 2% NSR 3 to HWG
