Mr. Sean Cleary reports

STRATEGIC RESOURCES SIGNS HIGH PURITY IRON ORE SUPPLY AND OFFTAKE AGREEMENTS WITH JAVELIN GLOBAL COMMODITIES ALONG WITH A US$150 MILLION WORKING CAPITAL FACILITY

Strategic Resources Inc. has signed definitive agency agreements with Javelin Global Commodities (SG) Pte. Ltd., a subsidiary of Javelin Global Commodities, to procure approximately four million tonnes of direct-reduction-grade iron ore concentrate (high-purity iron) and sell up to four million tonnes a year of direct-reduction-grade iron pellets from Strategic's planned high-purity iron pelletizer facility at Port Saguenay, Que. Along with these agreements, Javelin and Strategic have signed an indicative term sheet for Javelin to provide a secured working capital facility up to $150-million (U.S.) to support the operations of the plant.

Sean Cleary, chief executive officer of Strategic Resources, commented: "These offtake agreements solidify our business plan to move ahead with the four-million-tonne high-purity iron pellet plant at Port Saguenay, Que., as phase 1 of the BlackRock project. Javelin is an outstanding long-term partner to work with given their demonstrated track record in the seaborne iron concentrate and iron pellet markets and provides another major international sponsor for the project. The completion of the offtake agreements is a significant milestone for Strategic and puts the company in a position to complete the required next steps over the first three quarters of 2025 as it works towards the start of construction of the high-purity iron pellet plant."

Key terms of the agreements:

• Javelin will be the exclusive agent for the supply of iron concentrate feed and the marketing of the high-purity iron ore pellets;
• A 10 -year contract from the completion of construction with an option for Strategic to terminate, including the right to terminate after seven years from the commencement of production of the iron ore products;
• Javelin will be paid a percentage fee on the total cost of the iron concentrate feed and percentage fee of the revenue from direct reduction iron pellet sales;
• Javelin will, subject to satisfactory due diligence and contract, provide a working capital facility of up to $150-million (U.S.) for the project for a period of up to three years.

Other project updates

Javelin will work with Strategic, its feasibility study consultant and Metso to provide iron ore concentrate samples from the selected feed sources for testing. This test work will allow Metso to optimize the pellet plant and refine the detailed engineering for the project. It is estimated that the feasibility study and testing will take approximately six months to complete.

Strategic will continue to have discussions with parties globally around their interest in financing or partnering on phase 2 of the project -- the Tenova direct reduction unit at Port Saguenay. Phase 2 allows for the production of direct reduced iron or hot briquetted iron, which would ultimately help with the global transition to electric arc furnaces in the steel industry. Phase 2 is permitted and would allow Quebec and Canada to capture more of the value in the global steel supply chain while helping to reduce global carbon dioxide emissions.

Construction of the two-way, multiuser conveyor belt at Port Saguenay is well advanced and on track for completion in 2025. The 1.5-kilometre conveyor system will serve to deliver iron ore concentrate and other materials from the wharf to the industrial park at Port Saguenay. The finished pellets will be transported on the same conveyor system to the wharf for export. The conveyor project, which is being funded by the federal government of Canada and the Province of Quebec, is expected to cost approximately $110-million.

The phased approach of building a four-million-tonne pellet plant as phase 1 of the BlackRock project means that consumption of natural gas will be significantly lower compared with the construction of the entire metallurgical facility planned for phases 2 and 3. Since the volumes have changed significantly, the project no longer meets the profitability requirements established by Energir's regulator. Therefore, the existing natural gas distribution contract signed in 2018 between Energir and Strategic Resources will be terminated. This enables Strategic Resources to benefit from the return of $4.27-million of cash onto its balance sheet from the letter of credit that had been put in place in April, 2023. This capital will be used to continue advancing the phase 1 high-purity iron pellet plant project. Taking into account the new volumes and the profitability required by Energir's regulator, a new natural gas distribution contract will have to be negotiated.

About Strategic Resources Inc.

Strategic Resources is a critical mineral development company focused on becoming a supplier of green steel inputs. The company has a planned metallurgical facility site in Canada and high-purity iron and vanadium projects in Canada and Finland. The company is developing its flagship BlackRock project, which is a fully permitted and ready-to-construct mine, concentrator and metallurgical facility located at a seaport in Quebec with full access to the St. Lawrence Seaway. The company's head office is in Montreal, Que.

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