Sonoran Desert Copper Corporation Energy Materials Project Option in Brazil

Rhea-AI Summary

Sonoran Desert Copper Corporation (SDCU) has signed an option agreement to acquire a 100% interest in two Brazilian energy materials projects: the Bahia Manganese Project (896.61 hectares) in Goias and the Rio Claro Titanium Project (1005.12 hectares) in Bahia. The agreement with Beko Invest Ltd requires SDCU to make staged payments totaling US$200,000 and issue 8 million common shares over 12 months. Upon successful exercise, BEKO will retain a 2% Net Smelter Royalty.

Additionally, SDCU is continuing its financing of up to $1 million through a unit offering at $0.10, with each unit including one share and one warrant exercisable at $0.15 for 24 months. The company has also discontinued its previously announced Chromite Project LOI.

Positive

• Acquisition of two strategic energy materials projects in Brazil totaling over 1,900 hectares
• Structured payment terms spread over 12 months reducing immediate financial burden
• Potential for additional energy materials assets in Brazil under the agreement
• Ongoing $1 million financing to support project development and working capital

Negative

• Significant share dilution with 8 million new shares to be issued for the acquisition
• 2% Net Smelter Royalty obligation on future production
• Termination of previously announced Chromite Project LOI
• Substantial cash payments required (US$200,000) within 12 months

Vancouver, British Columbia--(Newsfile Corp. - May 5, 2025) - Sonoran Desert Copper Corporation (TSXV: SDCU) ("SDCU'' or the "Company") is pleased to announce that the Company has signed an option agreement (the "Purchase Option Agreement") dated May 2^nd 2025, to acquire a 100-per-cent interest in the Bahia Manganese Project and the Rio Claro Titanium Project (collectively, the "Brazil Projects"). The Bahia Manganese Project is 896.61 hectares in Goias, Brazil and the Rio Claro Titanium Project is 1005.12 hectares in Bahia, Brazil.

Transaction Details

The Brazil Projects are being optioned from Beko Invest Ltd ("BEKO").

This Purchase Option Agreement shall terminate if SDCU fails to advance the required cash and share payments to BEKO as per the following within the time limit as follows:

• if SDCU fails to advance US$20,000 as a down payment on execution of this Option Agreement and advance US$30,000 and issue to BEKO 4,000,000 common shares of SDCU within ten days of receipt of TSX Venture Exchange Approval;

• if SDCU fails to advance US$75,000 and issue to BEKO a further 2,000,000 common shares of SDCU on or before the six-month anniversary date of Exchange Approval; and

• if SDCU fails to advance US$75,000 and issue to BEKO a further 2,000,000 common shares on or before the twelve-month anniversary date of Exchange Approval.

SDCU agrees to grant BEKO a two percent (2%) Net Smelter Royalty against the Brazil Projects upon the successful exercise of the Option as detailed above.

The common shares issued to BEKO by SDCU under the terms of the Purchase Option Agreement, will be subject to a four-month statutory hold period which will begin on the date of issuance of the common shares.

The Parties are evaluating further energy materials assets in Brazil that may fall under this Purchase Option Agreement.

Closing Conditions

The execution of the Definitive Agreements will be subject to the following conditions:

(a) Each Party obtaining all necessary and appropriate governmental, regulatory, contractual, board of director, shareholder, member and other third-party licenses, permits, approvals and/or consents which are required to execute the Definitive Agreements.

(b) SDCU obtaining TSX Venture Exchange approvals for the transaction.

(c) Such other necessary and appropriate conditions as the parties shall mutually agree.

Chromite Project LOI

Further to the News Release dated December 6, 2024, the Company has elected not to proceed further with the Chromite Project LOI. The Company did not make any payments related to the LOI.

Update on Financing

Further to the news release of February 13, 2025, the company is continuing its financing of up to 10 million units at 10 cents for aggregate gross proceeds of up to $1-million, with each unit consisting of one common share of the company and one common share purchase warrant, with each warrant being exercisable for an additional common share at an exercise price of 15 cents for 24 months. The warrants will be subject to the right of the company to accelerate the exercise of the warrants if the shares of the company trade at or above 50 cents for a period of 10 consecutive trading days. Finders' fees in accordance with TSX Venture Exchange policies may apply to the financing. All securities issued pursuant to the financing will be subject to a four-month hold. Proceeds from the financing will be used for project payments, continuing development of the company's projects and general working capital.

ABOUT SONORAN DESERT COPPER CORPORATION

Sonoran Desert Copper Corporation is focused on securing, developing and monetizing energy materials assets and technologies to build shareholder value.

On behalf of the Board of Directors of
SONORAN DESERT COPPER CORPORATION

"Brian Leeners"

Brian Leeners, CEO & Director
brianleeners@gmail.com / +1 604-862-4184 (WhatsApp)

FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE

The information contained herein contains "forward-looking statements" within the meaning of applicable securities legislation. Forward-looking statements relate to information that is based on assumptions of management, forecasts of future results, and estimates of amounts not yet determinable. Any statements that express predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance are not statements of historical fact and may be "forward-looking statements.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/250790

FAQ

What are the key terms of SDCU's Brazil Projects acquisition agreement?

SDCU must pay US$200,000 and issue 8 million common shares over 12 months to acquire 100% interest in the Bahia Manganese and Rio Claro Titanium Projects, with a 2% Net Smelter Royalty to BEKO.

What is the size and location of SDCU's new Brazilian projects?

The Bahia Manganese Project is 896.61 hectares in Goias, Brazil, and the Rio Claro Titanium Project is 1005.12 hectares in Bahia, Brazil.

What financing is SDCU currently pursuing?

SDCU is raising up to $1 million through units at $0.10, each including one share and one warrant exercisable at $0.15 for 24 months.

What happens if SDCU fails to make the required payments for the Brazil Projects?

The Purchase Option Agreement will terminate if SDCU fails to make the required cash payments and share issuances within the specified timeframes.

What is the status of SDCU's Chromite Project LOI?

SDCU has elected not to proceed with the Chromite Project LOI and made no payments related to it.