Vancouver, British Columbia – Lancaster Resources Inc. (CSE:LCR | OTCQB:LANRF | FRA:6UF0) (the “Company”) announces entry into a Spin-Off  Agreement with Lancaster’s wholly owned subsidiary Nelson Lake Copper Corp. (“Nelson Lake”) to spin off a majority of its interest in Nelson Lake Copper to Lancaster Resources shareholders.  Incorporated on December 15, 2023, and extra-provincially registered in Saskatchewan, Nelson Lake has a 100% interest in the Nelson Lake Copper property in Saskatchewan, Canada.

The Nelson Lake Copper property is adjacent to notable copper exploration projects, such as Cosa Resources Heron Property and Rio Tinto’s Janice Lake (optioned from Forum Energy). The 5,722-hectare property targets sedimentary hosted copper in the Wollaston Domain copperbelt offers a unique copper exploration opportunity.

Share Distribution Details

Pursuant to the Spin-Off Agreement, the parties shall enter into an Arrangement Agreement and a Plan of Arrangement whereby Lancaster will issue 550,000 Lancaster common shares with a deemed value of $0.06 each to Nelson Lake in exchange for 1,600,000 Nelson Lake shares at a deemed value of  $0.02 each.  Approximately 1,000,000 common shares of Nelson Lake (the “Dividend Shares”) will be distributed to Lancaster shareholders at the closing of the transaction.

The record date to determine voting rights and the rights to receive Dividend Shares is January 9, 2024 (the “Record Date”). Shareholders of Lancaster as of January 9, 2024, will be eligible to receive Dividend Shares at a distribution ratio of one Dividend Share for every 50 Lancaster shares held. Shares of Lancaster Resources purchased in the market require 3 business days before ownership is established, so shares purchased after the close of trading on Thursday, January 4, 2023, will not be eligible to receive Dividend Shares.  Completion of the spin-off transaction is conditional upon the parties entering into an Arrangement Agreement and a Plan of Arrangement, completing an audit of the financial statements of Nelson Lake, completing a 43-101 Technical Report of the Nelson Lake Copper Project and obtaining approvals of the British Columbia Supreme Court and of the shareholders of Lancaster. The spin-off transaction will not affect the shareholdings of Lancaster common shares and there will be no change in the corporate structure of Lancaster. Lancaster Shareholders holding shares as of the Record Date will receive shares in Nelson Lake Copper Corp. in addition to shares held in Lancaster Resources.

Executive Comments

Penny White, President & CEO of Lancaster Resources, stated: “We are thrilled to unlock shareholder value through this strategic spin-off, enabling Nelson Lake to independently exploit its copper project to its full potential.”

Lancaster’s Ongoing Commitment

Lancaster Resources remains committed to exploring and developing critical metals, including the Alkali Flat Lithium Brine Project in New Mexico and the Trans-Taiga Lithium Property in Quebec.

The spin-off transaction will be a “related party transaction” within the meaning of Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions (“MI 61-101“). The transaction will be exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 as the fair market value of the transaction will not exceed 25% of Lancaster’s market capitalization.