Skellefte

Skellefte Project

Overview

Sweden ranked 9th out of 68 jurisdictions in the Fraser Institute’s Investment Attractiveness Index 2025, placing it within the global top ten for mining investment attractiveness.

One of the world's most productive VMS belts

Large-scale mining in the Skellefte district dates from the early 1900s and continues today. The district has produced and defined mineral resources of over 200 million tonnes of polymetallic massive sulphide ore and over 70 million tonnes of gold-and-tellurium ore. More than 30 deposits have been mined since 1924, with four currently in operation. The belt is supported by extensive infrastructure, including paved roads, rail access, power, and the nearby Rönnskär smelter and Boliden concentrator.

The district is particularly recognized for the gold endowment of its VMS deposits relative to global averages, including a number of auriferous VMS systems with multi-gram-per-tonne gold grades. Publicly disclosed deposit data summarized for the district indicate aggregate historical and currently defined endowment at average grades of approximately 1.9 g/t Au, 0.7% Cu, 3.0% Zn, 0.4% Pb and 45 g/t Ag. The Boliden deposit has been described in the literature at approximately 8.4 million tonnes grading 15.5 g/t Au, and is recognized as one of the global archetypes of the gold-rich VMS deposit class.

A century of exploration and mining in the district has been led principally by Boliden AB, whose work has substantially defined the modern understanding of Skellefte volcanic stratigraphy, alteration systems and structural controls on mineralization. Canstar’s exploration approach builds on that body of work.

An underexplored northern extension

The Project sits within the northern portion of the Skellefte district, an area characterized by similar prospective volcanic stratigraphy of the Skellefte Group to that hosting most of the district’s known VMS deposits, but with a substantially lower density of historical discoveries than in the southern belt. Canstar believes this discovery gap may reflect exploration effectiveness rather than first-order geological prospectivity.

Much of the district’s historical discovery success was built through boulder prospecting and ground geophysics — methods less effective in areas of thicker, more continuous till cover, where mineralized boulder trains can be sparse or absent, bedrock exposure is limited, and historical geophysical anomalies can be more difficult to differentiate.

Indicators of geological prospectivity within and adjacent to the Project include:

• Favourable Skellefte Group felsic volcanic and volcaniclastic stratigraphy mapped across the licences, including rhyolitic units, tuffs, hyaloclastites and volcaniclastic sediments characteristic of VMS-hosting volcanic environments;
• An undeveloped VMS deposit (the Eva or Copperstone deposit) located adjacent to Canstar’s exploration licences in this northern part of the district; however, mineralization on adjacent or nearby properties is not necessarily indicative of mineralization on the Project;
• Sericite, sericite–pyrite and quartz–sericite–pyrite alteration zones documented in historical drilling and trenching, including locally intense alteration zones tens to hundreds of metres wide;
• Occurrences of “blue quartz” porphyritic rhyolite, a textural feature associated with some felsic volcanic rocks that host VMS mineralization in the Skellefte belt and in other gold-rich VMS districts globally;
• Disseminated to locally semi-massive sulphide mineralization (pyrite, pyrrhotite, with minor chalcopyrite) reported in historical drill core, alongside trace to locally elevated copper observations including malachite staining;
• Multiple untested or under-tested geophysical anomalies, including a large IP anomaly on one of the granted permits, approximately 1.0 km by 1.3 km based on historical survey data, that has not been drill-tested;
• A large body of historical exploration data — drill logs, geophysical surveys, mapping, sampling — much of which exists in raw or unprocessed format and has not been integrated using modern interpretation tools; and
• Proximity to the regional Skellefte VMS ore horizon and to a long-lived crustal-scale structure interpreted to extend across the district.

Phase 1 exploration program

The Phase 1 program is designed to rapidly screen the consolidated Project area for geochemical anomalies indicative of buried VMS mineralization, and to generate a prioritized portfolio of potentially drill-testable targets. It was designed in close consultation with Dr. Rodney Allen and the LithOps technical team.

• Regional till geochemistry. Approximately 2,150 till samples across the granted permits on a regional grid on the order of 400 m, refined using LiDAR-guided site selection. Approximately 280 additional samples are planned over selected portions of the additional claims as permits are issued.
• Real-time portable XRF screening. pXRF is not a substitute for laboratory assays, but provides rapid indications of geochemical anomalism that allow follow-up work to begin before laboratory results are received.
• Laboratory analysis. All till samples are submitted to an internationally accredited laboratory for ultra-trace ICP-MS multi-element analysis, with quality assurance and quality control samples inserted at industry-standard rates.
• Modern reinterpretation of historical data. Historical drill core, drill logs, geophysical surveys and mapping data are compiled and re-evaluated using modern interpretation tools.
• Phased follow-up. Subject to Phase 1 results, follow-up work is expected to include detailed prospecting and mapping, additional rock and soil sampling, ground and airborne geophysical surveys, and in due course drill-testing of the highest-ranked targets.

LithOps serves as project operator in Sweden, responsible for in-country staffing, logistics, sample handling, permitting administration and program execution. Overall program oversight is provided by Canstar’s executive team. This structure leaves Canstar’s Newfoundland team dedicated to the drill program at the flagship Mary March project.

Geological leadership

Exploration at Skellefte is guided by Dr. Rodney Allen, former Chief Geologist of Boliden AB, who has worked in the Skellefte district for more than 20 years and is a co-author of the integrated VMS exploration model widely cited in modern targeting practice. Dr. Allen contributed to the discovery of polymetallic deposits within the Skellefte belt and the Bergslagen district further south.

Transaction terms

Term	Detail
Interest acquired	100% legal and beneficial interest in three granted exploration permits
Permits	Missenträsk nr 101, Snotterberget nr 101, Stöverberg nr 101 — valid through March 2029
Cash consideration	C$50,000 on execution; C$100,000 payable within twelve months of execution
Share consideration	15,000,000 common shares issued on closing at a deemed price of C$0.035
Hold period	Four months and one day from issuance, expiring 4 November 2026
Royalty — granted permits	2.5% NSR to LithOps; Canstar may buy down up to 1.0% (0.5% for C$1,000,000; a further 0.5% for C$2,000,000), leaving 1.5%
Royalty — additional claims	Expected 1.25% NSR; buy-down of up to 0.5% in two 0.25% tranches (C$500,000 and C$1,000,000), leaving 0.75%
Additional claims	~37,000 hectares applied for; transfer on grant, for reimbursement of staking costs of approximately C$110,000

District figures and references to other deposits in the Skellefte belt are third-party historical information provided as regional context only. They predate NI 43-101, have not been verified by the Company’s Qualified Person, and are not indicative of mineralization on the Company’s property. No mineral resource has been established on the Company’s Skellefte permits.