District Closes Acquisition to Consolidate 100% of the Viken Energy Metals Deposit in Sweden, which contains an Historical Inferred Resource of 1.15 Billion Pounds of U3O8

Highlights:

• The four mineral licences acquired are in good standing until late-2025, and comprise Norra Leden, Norr Viken, Lill Viken, and Storviken, which has increased the area of the Company’s Viken Property from 9,367 hectares (ha) to 10,812 ha.
• The Norra Leden, Norr Viken, Lill Viken mineral licenses cover the southeast and east areas of the Viken Deposit that remain open to the southeast based on historic drill results.
• The Storviken mineral licence covers the southwest corner of the Viken Deposit that remains open to the south and west based on historic drill results.
• There is currently a moratorium on uranium mining and exploration that was imposed in 2018. The Swedish Government has indicated a positive stance on re-evaluating and lifting the moratorium.

The Purchase Agreement

Pursuant to the definitive purchase agreement (the ”Purchase Agreement”), District has acquired the Norra Leden, Norr Viken, Lill Viken and Storviken mineral licences from an arm’s length vendor (the ”Vendor”) upon the following principal terms:

• CDN $50,000 cash paid to the Vendor on closing.
• CDN $50,000 cash payable to the Vendor within 30 days following the moratorium on uranium exploration and mining in Sweden being lifted.
• 1,000,000 District shares issued to the Vendor on closing.
• 3,500,000 District shares to be issued to the Vendor within 30 days following the moratorium on uranium exploration and mining in Sweden being lifted. These District shares will be subject to a voluntary lock-up pursuant to which 500,000 will be released after four months after issuance, 500,000 will be released after six months after issuance, 1,000,000 will be released after twelve months after issuance, 1,000,000 will be released after 18 months after issuance and 500,000 will be released twenty-four months after issuance.
• A 2% net smelter returns (“NSR”) royalty granted to the Vendor on closing that can be bought back in its entirety at any time for a value of CDN $8,000,000 where the first 1% NSR royalty may be purchased for CDN $2,000,000.

Pursuant to applicable securities laws, the District shares issued to the Vendor on closing are subject to a four-month and one day hold period from the closing.

The Viken Energy Metals Deposit

The Viken Deposit is situated in the province of Jämtland, approximately 570 km northwest of Stockholm, Sweden. Infrastructure is well developed in the area with daily air service, as well as rail and truck freight services. Electrical power and modern communications are also readily available in the area.

The Geological Survey of Sweden (SGU) carried out work on the Alum Shales from 1977 to 1978 and drilled approximately 19 holes within and in the vicinity of the Viken Deposit.  In 2005, Continental Precious Minerals Inc. (“CPM”) purchased mineral licences that covered prospective Alum Shales where CPM drilled 26,293 m in 133 holes from 2006 to 2008 to delineate the Viken Deposit.

CPM retained P&E Mining Consultants Inc. to carry out a mineral resource estimate and preliminary economic assessment in 2010 that resulted in the following historical mineral resource estimate: (Table 1: 2010 Viken Deposit Historical Mineral Resource Estimate¹⁾

Notes:

• The mineral resource estimates contained in this table are considered to be “historical estimates” under National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”). A qualified person has not done sufficient work to classify the historical estimate as a current mineral resource, and the Company is not treating these historical estimates as current mineral resources. The mineral resource estimate should not be relied upon. The Company would need to conduct an exploration program, including twinning of historical drill holes in order to verify the Viken Deposit historical estimate as a current mineral resource.
• The categories of mineral resources were classified under the previous definition standards and do no match the current definition standards in NI 43-101.
• Weighting of composite samples by linear Ordinary Kriging was used for the estimation of block grades. Kriging parameters were based on the grade-element variography derived from the mineralized shale domain. A block discretization level of 5 x 5 x 2 was used during kriging. The mineralized shale domain was treated as a hard boundary, and data used during estimation were limited to composite samples located within the mineralized shale domain wireframe. Only blocks wholly or partially within the mineralized shale domain were estimated. The mineralized shale domain was treated as a hard boundary, and data used during estimation.
• During the first pass, four samples from each of three drill holes within 110m of the block centroid were required. All block grades estimated during the first pass were classified as Indicated.
• During the second pass, blocks not populated during the first pass were estimated. A minimum of three and a maximum of six samples from one or more drillholes within 330 m of the block centroid were required. All block grades estimated during the second pass were classified as Inferred.
• An internal break-even cut-off grade of US $7.50/tonne was used in reporting this historical estimate.

In 2012, a bio-heap leach scenario was evaluated, and P&E Mining Consultants were retained again to conduct an updated mineral resource estimate and preliminary economic assessment on the Viken Deposit with the following historical estimate: (Table 2: 2014 Viken Deposit Historical Mineral Resource Estimate²⁾

Notes:

• The mineral resource estimates contained in this table are considered to be “historical estimates” under NI 43-101. A qualified person has not done sufficient work to classify the historical estimate as a current mineral resource, and the Company is not treating these historical estimates as current mineral resources. The mineral resource estimate should not be relied upon.  The Company would need to conduct an exploration program, including twinning of historical drill holes in order to verify the Viken Deposit historical estimate as a current mineral resource.
• The categories of mineral resources were classified under the previous definition standards and do no match the current definition standards in NI 43-101.
• Block grades were estimated using Ordinary Kriging of capped composite samples. Only blocks wholly or partially within the mineralized shale domain were estimated, and between six and fifteen samples from two or more drill holes within 660 m of the block centroid were used for estimation. A small area in the Southern portion of the deposit with an average drillhole spacing of approximately 120 m has been classified as Indicated.
• An internal break-even cut-off grade of US $11.00/tonne was used in reporting this historical estimate.

The Viken Deposit is a polymetallic shale resource contained within the Cambrian Viken Shale which regionally is referred to as the Alum Shale. The Alum Shale is enriched in metals such as vanadium, uranium, nickel, copper, zinc, and molybdenum. It occurs over a significant area in Sweden and is locally valued as a bituminous shale with recoverable hydrocarbons. The Alum Shale is regionally extensive in Sweden.

The stratigraphy across the Viken mineral licence application consists of upper Middle and Upper Cambrian age Alum Shale occurring as both in situ and fault detached blocks, with the latter having greater potential for economic mineralization due to imbrication of mineralized blocks. The Alum Shale is mostly exposed at surface and is underlain by Proterozoic granites and gneisses thrust Eastward over Archean granitic basement rocks. The thickness of the Alum Shale host rock has been tectonically thickened from 20 to 30 m by thrusting and folding during the Silurian to approximately 180 m.

Mineralization of potential economic significance is hosted in Middle and Upper Cambrian Alum Shale, with the Upper Cambrian age strata more enriched in vanadium and uranium than the Middle Cambrian.³ Vanadium occurs within the lattice of a mica mineral named roscoelite. Uranium values are predominantly associated with sub-micron-scale uraninite crystals. Nickel, molybdenum, copper and zinc are present as sulphides.

References

¹ “Preliminary Economic Assessment on the Viken MMS Project, Sweden” for Continental Precious Minerals Inc. dated October 19, 2010 with an effective date of September 10, 2010.. P&E Mining Consultants Inc., EHA Engineering Ltd., and G.A. Harron & Associates Inc.

² “Updated Technical Report, Resource Estimate and Preliminary Economic Assessment on the Viken MMS Project, Sweden” for Continental Precious Minerals Inc. dated February 27, 2014 with an effective date of February 6, 2014. P&E Mining Consultants Inc.

³ Andersson, A, Dahlman, B., Gee, D.G. and Snäll, S., 1985: The Scandanavian Alum Shale, S.G.U., Ser. Ca Nr 56, 50 p.

Technical Information

All scientific and technical information in this news release has been prepared by, or approved by Garrett Ainsworth, PGeo, President and CEO of the Company. Mr. Ainsworth is a qualified person for the purposes of NI 43-101.

Drilling data disclosed in this news release relates to historical drilling results. District has not undertaken any independent investigation of the sampling, nor has it independently analyzed the results of the historical exploration work in order to verify the results. District considers these historical drill results relevant as the Company is using this data as a guide to plan exploration programs. The Company’s current and future exploration work includes verification of the historical data through drilling.

About District Metals Corp.

District Metals Corp. is led by industry professionals with a track record of success in the mining industry. The Company’s mandate is to seek out, explore, and develop prospective mineral properties through a disciplined science-based approach to create shareholder value and benefit other stakeholders.

District is a polymetallic exploration and development company focused on the Viken and Tomtebo Properties in Sweden. The Viken Property covers 100% of the uranium-vanadium Viken Deposit, which is an asset with substantial exploration and development expenditures that resulted in the definition of large historic polymetallic resource estimates in 2010 and 2014. The Viken Deposit is amongst the largest deposits by total historic mineral resources of uranium and vanadium in the world.

The advanced exploration stage Tomtebo Property is located in the Bergslagen Mining District of south-central Sweden and is situated between the historic Falun Mine and Boliden’s Garpenberg Mine that are located 25 km to the northwest and southeast, respectively. Two historic polymetallic mines and numerous polymetallic showings are located on the Tomtebo Property along an approximate 17 km trend that exhibits similar geology, structure, alteration and VMS/SedEx style mineralization as other significant mines within the district.

For further information on the Tomtebo Property, please see the technical report entitled “NI 43-101 Update Technical Report on the Tomtebo Project, Bergslagen Region of Sweden” dated effective October 15, 2020 and amended and restated on February 26, 2021, which is available on SEDAR+ at www.sedarplus.ca.

On Behalf of the Board of Directors

“Garrett Ainsworth”

President and Chief Executive Officer
(604) 288-4430

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.

Cautionary Statement Regarding “Forward-Looking Information”

This news release contains certain statements that may be considered “forward-looking information” with respect to the Company within the meaning of applicable securities laws. In some cases, but not necessarily in all cases, forward-looking information can be identified by the use of forward-looking terminology such as “plans”, “targets”, “expects” or “does not expect”, “is expected”, “an opportunity exists”, “is positioned”, “estimates”, “intends”, “assumes”, “anticipates” or “does not anticipate” or “believes”, or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “might”, “will” or “will be taken”, “occur” or “be achieved” and any similar expressions. In addition, any statements that refer to expectations, predictions, indications, projections or other characterizations of future events or circumstances contain forward-looking information. Statements containing forward-looking information are not historical facts but instead represent management’s expectations, estimates and projections regarding future events. Forward-looking information in this news release relating to the Company include, among other things, statements relating to the Purchase Agreement and future share issuances and cash payments; the Company’s Swedish polymetallic properties; the Company’s planned exploration activities, including its drill target strategy and next steps for the Swedish properties; and the Company’s interpretations and expectations about the results on the Swedish properties.

These statements and other forward-looking information are based on opinions, assumptions and estimates made by the Company in light of its experience and perception of historical trends, current conditions and expected future developments, as well as other factors that the Company believes are appropriate and reasonable in the circumstances, as of the date of this news release, including, without limitation, assumptions about the reliability of historical data and the accuracy of publicly reported information regarding past and historic mines in the Bergslagen district; and in respect of the Swedish properties; that the Swedish government will eventually lift or amend its moratorium on uranium exploration and mining in Sweden; the Company’s ability to raise sufficient capital to fund planned exploration activities, maintain corporate capacity; and stability in financial and capital markets. 

Forward-looking information is necessarily based on a number of opinions, assumptions and estimates that, while considered reasonable by the Company as of the date such statements are made, are subject to known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information, including but not limited to risks associated with the following: the reliability of historic data on District’s properties; the Company’s ability to raise sufficient capital to finance planned exploration; that the Swedish government maintains its moratorium on uranium exploration and mining in Sweden for the foreseeable future; the Company’s limited operating history; the Company’s negative operating cash flow and dependence on third-party financing; the uncertainty of additional funding; the uncertainties associated with early stage exploration activities including general economic, market and business conditions, the regulatory process, failure to obtain necessary permits and approvals, technical issues, potential delays, unexpected events and management’s capacity to execute and implement its future plans; the Company’s ability to identify any mineral resources and mineral reserves; the substantial expenditures required to establish mineral reserves through drilling and the estimation of mineral reserves or mineral resources; the uncertainty of estimates used to calculated mineralization figures; changes in governmental regulations; compliance with applicable laws and regulations; competition for future resource acquisitions and skilled industry personnel; reliance on key personnel; title matters; conflicts of interest; environmental laws and regulations and associated risks, including climate change legislation; land reclamation requirements; changes in government policies; volatility of the Company’s share price; the unlikelihood that shareholders will receive dividends from the Company; potential future acquisitions and joint ventures; infrastructure risks; fluctuations in demand for, and prices of metals; fluctuations in foreign currency exchange rates; legal proceedings and the enforceability of judgments; going concern risk; risks related to the Company’s information technology systems and cyber-security risks; and risk related to the outbreak of epidemics or pandemics or other health crises. For additional information regarding these risks, please see the Company’s Annual Information Form dated July 11, 2022, under the heading “Risk Factors”, which is available at www.sedarplus.ca. These factors and assumptions are not intended to represent a complete list of the factors and assumptions that could affect the Company. These factors and assumptions, however, should be considered carefully. Although the Company has attempted to identify factors that would cause actual actions, events or results to differ materially from those disclosed in the forward-looking information or information, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. Also, many of such factors are beyond the control of the Company. Accordingly, readers should not place undue reliance on forward-looking information. The forward-looking information is made as of the date of this news release, and the Company assumes no obligation to publicly update or revise such forward-looking information, except as required by applicable securities laws.