GREENRIDGE EXPLORATION ANNOUNCES LETTER OF INTENT TO ACQUIRE ALX RESOURCES CORP.

Mining
Thursday, September 5th, 2024 2:21 pm EDT

Greenridge Exploration Inc. and ALX Resources Corp. have signed a non-binding letter of intent (LOI) dated Sept. 4, 2024, pursuant to which Greenridge will acquire all of the outstanding and issued common shares of ALX. The proposed transaction is an arm’s-length transaction that will create a leading Canadian uranium exploration company with interests in 15 uranium exploration projects that total approximately 276,000 hectares across renowned Canadian uranium districts, including the Athabasca basin, the Thelon basin and Elliot Lake. The combined entity will have interests in an additional 13 lithium, nickel, gold and copper properties across Canada.

Strategic rationale for the proposed transaction:

• Creates leading and diversified Canadian explorer of strategic metals: The combined entity will own or have interests in 28 projects covering approximately 493,000 hectares with considerable exposure to potential uranium, lithium, nickel, copper and gold discoveries.
• Adds one of the largest uranium property portfolios in the world-class Athabasca basin: In addition to Carpenter Lake, ALX has interests in 11 other projects and properties covering approximately 231,000 hectares in the Athabasca basin. Highlighted projects include:
  • Black Lake (40 per cent ALX, 50.43 per cent Uranium Energy Corp. and 8.57 per cent Orano Canada Inc.) — 2004 discovery hole (BL-18) intersected 0.69 per cent U3O8 (triuranium octoxide) over 4.4 metres; over 150 holes drilled to date;
  • Gibbons Creek (currently 100 per cent ALX) — high-grade boulders located in 2013 with grades of up to 4.28 per cent U3O8; four of the five holes drilled in 2024 intersected uranium mineralization at or near unconformity; uranium mineralization found in two areas located 500 metres apart;
  • Hook-Carter (currently 80 per cent Denison Mines Corp. and 20 per cent ALX) — 13 kilometres from NexGen’s Arrow deposit and 20 kilometres from Fission’s Triple R deposit; hosts a 15-kilometre-long exploration corridor prospective for uranium; under the terms of a 2024 amendment to the joint venture agreement, ALX can earn an additional 5.0 per cent for a total of a 25-per-cent interest by spending $3-million by November, 2026; Denison has spent approximately $7.05-million to date, which includes 11,757 metres drilled from 2018 to 2019;
  • McKenzie Lake (100 per cent ALX) — AI (artificial intelligence) work identified targets following 2021 magnetic and radiometric survey; boulders were found with grades of up to 0.101 per cent U3O8.
• Consolidates ownership in the Carpenter Lake project: Following the proposed transaction, Greenridge will own 60 per cent of Carpenter Lake, with the option to increase to 100 per cent;
• Enhanced capital markets profile and shareholder base: The pro forma company is expected to have a market capitalization of approximately $35-million and a strong cash position;
• Enhanced management and board: The transaction adds Warren Stanyer, chief executive officer of ALX, as president and director as well as another nominee to the board of directors of Greenridge.
• G&A (general and administrative) cost savings: The companies anticipate material cost savings from consolidating corporate G&A, corporate development, and investor relations and marketing activities compared with operating as two separate entities.

Benefits to ALX shareholders:

• Significant and immediate premium: The exchange ratio represents a 130-per-cent premium to the 20-day VWAP (volume-weighted average price) of the ALX shares on the TSX Venture Exchange for the period ended Sept. 4, 2024.
• Exposure to the Nut Lake project: The Nut Lake project is a 5,853-hectare property in the Thelon basin, located approximately 55 kilometres north of Atha Energy’s Angilak project and the Lac 50 Trend deposit (inferred resource containing 43 million pounds U3O8 and 10.4 million pounds molybdenum). The project hosts high-grade vein hosted grab samples of up to 4.36 per cent U3O8, 53.16 ounces per ton silver, 1.15 per cent lead and 7 per cent nickel. The project has seen approximately 6,920 feet of diamond drilling, with the most noteworthy being at the tundra showing, where hole Winkie AX W-24 intersected nine feet of 0.69 per cent U3O8, including 4.9 per cent U3O8 over one foot , from eight feet depth.

Russell Starr, chief executive officer of Greenridge, commented: “We are incredibly excited to announce this first step to acquire ALX Resources. The acquisition highlights our commitment in becoming a key player in today’s energy transition. After the proposed transaction, Greenridge will have a significant portfolio of projects across many strategically important minerals. We look forward to leveraging ALX’s expertise in the Athabasca basin to explore our significant project portfolio. In conjunction with partners like Denison Mines and Uranium Energy Corp., we are confident that the acquisition will only further bolster the discovery potential of our exploration portfolio. We believe that our portfolio, coupled with our combined technical prowess, will allow the company to quickly develop its most prospective projects.”

Mr. Stanyer, chief executive officer and chairman of ALX, commented: “ALX is pleased to unite with Greenridge to create a dynamic uranium and critical metals exploration company focused on locating new mineral deposits. The combination of ALX’s technical team with Greenridge’s financial capability provides each company’s shareholders with multiple opportunities for discovery in some of Canada’s best exploration districts.”

ALX’s uranium project portfolio

ALX holds a wealth of uranium properties; namely its Hook-Carter, Black Lake, Sabre, Gibbons Creek, Javelin, McKenzie Lake and Bradley Lake uranium properties, located in the heart of Canada’s premier uranium exploration district. These properties will be pivotal for Greenridge as the company evolves and further develops its exploration capabilities.

Previous surface work on the properties delivered promising geological results for the company to build momentum in future exploration. Particularly, McKenzie Lake’s previous 2023 exploration saw three samples, which returned 844 parts per million U total (0.101 per cent U3O8), 273 parts per million U total, and 259 parts per million U total. Furthermore, ALX’s Bradley Lake uranium property saw three samples collected in 2022 from the Bradley West showing along a trending structure visible on surface for 60 metres that returned uranium values ranging from 0.08 per cent to 0.43 per cent U3O8 partial. In addition, two samples from the Bradley East showing, located 170 metres east of the Bradley West showing, returned values ranging from 0.27 per cent to 1.77 per cent U3O8 partial.

ALX owns a 40-per-cent interest in the Black Lake uranium property while Uranium Energy owns a 51.43-per-cent interest and Orano owns an 8.57-per-cent interest. The property is also within driving range of Orano Canada/Denison Mines’ McClean Lake uranium mill. Historical drilling conducted by a predecessor company of Uranium Energy identified unconformity-style mineralization extending over a 1.7-kilometre strike length in the northern section of the property, adjacent to the Eastern fault, which runs parallel to the Black Lake fault.

ALX owns 20 per cent of the Hook-Carter uranium property while the remaining 80 per cent is owned by Denison Mines. Denison Mines has spent $7.05-million in exploration to date. The property consists of 11 claims covering 25,115 hectares. The property is approximately 13 kilometres northeast of NextGen’s Arrow deposit, 20 kilometres northeast of Fission Uranium’s Triple R uranium deposit and approximately eight kilometres northeast of Cameco/Orano/Purepoint’s Spitfire, Hornet and Dragon discoveries. Under the terms of a 2024 amendment to the joint venture agreement, ALX can earn an additional 5.0 per cent for a total of a 25-per-cent interest by spending $3-million by November, 2026.

The company holds several other highly prospective uranium projects, which are in different stages of advancement. The technical team will evaluate each project on its merits and implement exploration strategies which build the most shareholder value.

Portfolio of lithium, nickel, copper and gold properties

ALX also brings an enriched portfolio, extending beyond uranium properties; lithium, nickel, copper and gold properties will be critical for the company to continue diversifying its own portfolio. Notably, ALX’s Ontario-situated Vixen gold project saw 2019 prospecting, mapping and sampling that returned values of 23.9 grams per tonne gold and 6.1 grams per tonne silver across four samples. A more comprehensive, helicopter-supported sampling program in 2020 provided gold values of up to 22.73 grams per tonne gold as well as 7.21 grams per tonne gold.

Additionally, ALX’s Cannon copper project, also situated in Ontario, hosts the historical Cannon copper mine and mill, which have a historical mineral resource of 415,000 tonnes grading 1.8 per cent copper over a width of 6.5 feet (1.98 metres) (source: Ontario Geological Survey, Open File Report 6366, Report of Activities 2019).

Note: This historical resource is not compliant with the standards of National Instrument 43-101.

The combination of both entities brings a robust set of projects in a variety of reputable Canadian mining jurisdictions.

Board of directors and management team

Upon completion of the proposed transaction, the board of directors of Greenridge will comprise five directors including: (i) the three directors currently on the Greenridge Board; and (ii) two directors, including Mr. Stanyer, ALX’s current chief executive officer and chairman, as well as another director to be mutually agreed upon by Greenridge and ALX.

Mr. Starr will continue to serve as chief executive officer and director of the combined entity. Mr. Stanyer is expected to join Greenridge as president.

Additional details of the proposed transaction and the LOI

Under the terms of the LOI, each common shareholder of ALX will receive 0.045 common share of Greenridge in exchange for each ALX common share held. The exchange ratio implies an offer price of 3.6 cents per ALX share and implies an offer premium of 140 per cent to ALX’s closing share price on Sept. 4, 2024, and a 130-per-cent premium to ALX’s volume-weighted average price of ALX shares on the TSX-V over the previous 20 trading days. Upon completion of the proposed transaction, existing Greenridge and ALX shareholders will own approximately 74.2 per cent and 25.8 per cent, respectively, of the common shares of the combined entity.

The LOI for the proposed transaction includes customary provisions, including an exclusivity period ending on Oct. 11, 2024. The final structure of the proposed transaction will be determined by the parties, based upon tax, securities and corporate law considerations, and will be governed by the terms of a definitive and binding agreement governing the proposed transaction. Both Greenridge and ALX expect to work toward entering into a definitive agreement by Oct. 10, 2024.

Completion of the proposed transaction is subject to, among other conditions, the following:

• Satisfactory completion of due diligence to the satisfaction of Greenridge and ALX;
• Entering into the definitive agreement following its approval by the board of directors of both Greenridge and ALX;
• ALX shareholders approving the proposed transaction by the requisite majority;
• Regulatory and court approvals;
• A fairness opinion from a financial adviser stating that the proposed transaction is fair, from a financial point of view, to ALX shareholders;
• No material adverse change or prescribed occurrence occurring in relation to either Greenridge or ALX;
• Other conditions customary for a public transaction of this nature.

The definitive agreement will include customary representations, warranties, covenants and conditions contained in agreements for transactions of this nature, including non-solicitation and lock-up provisions, business restrictions, and a no-material-adverse-change clause. Red Cloud Securities Inc. is an adviser to ALX and will receive finders’ fees in connection with the proposed transaction, the amount of which shall be determined at a later date.

Under the proposed transaction, all outstanding stock options and warrants of ALX, which remain unexercised on the date upon which the proposed transaction becomes effective, will, following the effective time of the proposed transaction, be exchanged and amended, respectively, to entitle the holder thereof to acquire Greenridge shares in lieu of ALX shares based on the exchange ratio.

It is anticipated that any securities to be issued under the proposed transaction will be offered and issued in reliance upon the exemption from the registration requirements of the U.S. Securities Act of 1933 provided by Section 3(a)(10) thereof. This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities.

Qualified person

The technical information in this news release regarding ALX Resources properties has been reviewed and approved by Robert Campbell, PGeo, who is a qualified person in accordance with the Canadian regulatory requirements set out in NI 43-101.

The technical information in this news release regarding Greenridge Exploration properties has been reviewed and approved by Jody Dahrouge, BSc, PGeo, of Dahrouge Geological Consulting Ltd., who is a qualified person in accordance with the Canadian regulatory requirements set out in NI43-101.

Mineralization on any other properties referred to herein is not necessarily indicative of mineralization on either of the properties of ALX or Greenridge.

About Greenridge Exploration Inc.

Greenridge Exploration is a mineral exploration company dedicated to creating shareholder value through the acquisition, exploration and development of critical mineral projects in North America. The Carpenter Lake uranium project is located in the Athabasca basin consisting of seven mineral claims covering 13,387 hectares across the Cable Bay shear zone and the company is advancing the project to test multiple high-priority targets. The company’s Nut Lake uranium project located in the Thelon basin includes historical drilling, which intersected up to nine feet of 0.69 per cent U3O8, including 4.90 per cent U3O8 over one foot, from eight feet depth.

The company’s Weyman copper project in southeastern British Columbia sits on the south portion of the famous Quesnel terrane. The company is led by an experienced management team and board of directors with significant expertise in capital raising and advancing mining projects. The Snook and Ranger Lake uranium projects, 4,899 hectares and 20,782 hectares, respectively, are located in Western Ontario, with multiple previous uranium occurrences across both projects.

About ALX Resources Corp.

ALX is based in Vancouver, B.C., Canada, and its common shares are listed on the TSX-V under the symbol AL, on the Frankfurt Stock Exchange under the symbol 6LLN and in the U.S. OTC (over-the-counter) market under the symbol ALXEF.

ALX’s mandate is to provide shareholders with multiple opportunities for discovery by exploring a portfolio of prospective mineral properties in Canada, which include uranium, lithium, nickel, copper and gold projects. The company uses the latest exploration technologies and holds interests in over 300,000 hectares of prospective lands in Saskatchewan, a stable jurisdiction that hosts the highest-grade uranium mines in the world, a producing gold mine, diamond deposits and historical production from base metal mines.

ALX’s uranium holdings in Northern Saskatchewan include 100-per-cent interests in the Gibbons Creek uranium project (currently the subject of an option earn-in agreement with Trinex Minerals Ltd., which can earn up to a 75-per-cent interest in two stages), the Sabre uranium project, the Bradley uranium project, and the Javelin and McKenzie Lake uranium projects; a 40-per-cent interest in the Black Lake uranium project (a joint venture with Uranium Energy and Orano Canada); and a 20-per-cent interest in the Hook-Carter uranium project, located within the uranium-rich Patterson Lake corridor with Denison Mines (80-per-cent interest) as operator of exploration since 2016 (currently the subject of an amended property agreement that would increase ALX’s interest to 25 per cent after fulfilling certain conditions).

ALX also owns 100-per-cent interests in the Firebird nickel project, the Flying Vee nickel/gold project, the Sceptre gold project and the Blackbird gold project, and it can earn up to an 80-per-cent interest in the Alligator Lake gold project, all located in Northern Saskatchewan, Canada. ALX owns or can earn up to 100-per-cent interests in the Electra nickel project and the Cannon copper project, located in historic mining districts of Ontario, Canada, and in the Vixen gold project (now under option to First Mining Gold Corp., which can earn up to a 100-per-cent interest in two stages).

ALX owns a 50-per-cent interest in eight lithium exploration properties staked in 2022 to 2023 collectively known as the Hydra lithium project, located in the James Bay region of Northern Quebec, Canada; a 100-per-cent interest in the Anchor lithium project in Nova Scotia, Canada; and 100-per-cent interests in the Crystal lithium project and the Reindeer lithium project, both located in Northern Saskatchewan, Canada.

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