Azimut and Centerra Sign Option Agreement for the Corvet and Kaanaayaa Properties

Azimut secures up to $16 million in partner-funded exploration with Centerra in Quebec.

What the company is saying

Azimut Exploration Inc. announces a definitive option agreement with a Centerra Gold Inc. subsidiary for the Corvet and Kaanaayaa properties in Quebec, emphasizing a partnership-driven approach to greenfield exploration. The company highlights that Centerra can earn up to a 70% interest by funding $16,000,000 in exploration and making up to $850,000 in cash payments, contingent on delivering a PEA with at least 1 million gold-equivalent ounces. The narrative stresses systematic, data-driven target generation using the AZtechMine™ system and underlines the properties’ large scale—556.3 km² across 1,082 claims. Management frames the agreement as a way to advance early-stage assets without diluting Azimut’s focus or balance sheet, while maintaining exposure to potential discoveries. Dr. Jean-Marc Lulin, President and CEO, is named as the qualified person responsible for the technical content. The announcement also notes Centerra’s 12.67% shareholding in Azimut, classifying the deal as a related party transaction under MI 61-101, and details board approval and regulatory exemptions. The tone is confident, with specific forward plans for till sampling and field validation, but the company is clear that the agreement is subject to TSXV approval.

What the data suggests

The agreement commits Centerra to staged exploration spending: $6,000,000 over four years for an initial 51% interest, with $1,250,000 as a firm Year 1 commitment and $250,000 in cash payments. To reach 70%, Centerra must deliver a PEA with a minimum 1 Moz AuEq resource, spend an additional $10,000,000 over six years, and pay up to $600,000 more. Minimum expenditures of $1,500,000 per property are required to vest interest. If either party’s stake falls below 10%, it converts to a 2% NSR royalty, with a 0.5% buyback for $2,000,000. The properties are large and underexplored, with Corvet (320.4 km², 623 claims) showing grab samples up to 7.86% Cu and 1.83 g/t Au, and Kaanaayaa (235.9 km², 459 claims) returning up to 7.39 g/t Au, 3.98 g/t Ag, 0.95% Mo, 0.33% Bi, and 0.14% Cu from the Moly prospect. These grab samples are selective and not indicative of average grades. The agreement is conditional on TSXV approval and does not alter Centerra’s 13,973,647 share (12.67%) holding in Azimut. The announcement is detailed on structure, obligations, and property data, but all value creation is contingent on future exploration success.

Analysis

The announcement is positive in tone, highlighting the signing of a definitive option agreement and the potential for significant exploration investment. However, the majority of key claims are forward-looking: the staged earn-in, the requirement to deliver a PEA with a 1 Moz AuEq resource, and the scheduled start of sampling and field validation. Realised facts are limited to the agreement signing, property size, and historical grab sample results. The benefits (potential resource, project advancement) are long-term, with the first option period alone spanning four years and the second option extending to six more years. The capital intensity is high, with $16 million in exploration expenditures required for full earn-in, but no immediate earnings or resource conversion is expected. The language around 'enhancing portfolio value' and 'exposure to potential discoveries' is aspirational, not supported by current results. The data supports a well-structured agreement but does not evidence near-term value creation.

Risk flags

• ●Exploration and resource risk is high: both Corvet and Kaanaayaa are underexplored, and current evidence is limited to selective grab samples, which may not reflect broader mineralization or economic viability.
• ●Execution risk is significant: Centerra’s staged earn-in requires $16,000,000 in exploration spending and a PEA with a 1 Moz AuEq resource, but there is no guarantee that technical milestones or resource thresholds will be met within the option periods.
• ●Regulatory and closing risk remains: the agreement is subject to TSXV approval and other customary closing conditions, so there is no certainty the transaction will close on the disclosed terms.
• ●Ownership and dilution risk: if Centerra does not proceed to the second option, Azimut’s interest increases to 51%, but if either party is diluted below 10%, their interest converts to a royalty, which may be less valuable if no mine is developed.
• ●Related party transaction risk: Centerra’s 12.67% shareholding in Azimut means the deal is a related party transaction under MI 61-101, raising potential concerns about governance and alignment, though board approval and regulatory exemptions are disclosed.

Bottom line

This is a substantial early-stage exploration partnership: Azimut leverages Centerra’s capital—up to $16 million in exploration plus $850,000 in cash payments—to advance two large, underexplored gold-copper properties in Quebec. The staged earn-in structure means Azimut retains upside if discoveries are made, while limiting its own financial exposure. The agreement is credible in structure and detail, but all value is contingent on future exploration success, with no near-term resource or production catalysts. Centerra’s significant shareholding and the related party nature of the deal are disclosed and approved, but do not guarantee project follow-through or commercial outcomes. Investors should watch for the actual commencement of till sampling and subsequent technical results as the next tangible milestones. The key takeaway: this is a long-term, high-risk, high-reward exploration bet, with real value only emerging if technical results justify further investment.

Announcement summary

(TSXV:AZM) (OTCQX:AZMTF) (TSX:CG) (NYSE:CGAU) Azimut Exploration Inc. has signed a definitive option agreement with a wholly owned subsidiary of Centerra Gold Inc. for the Corvet and Kaanaayaa properties in the Eeyou Istchee James Bay region of Quebec, Canada. The properties were staked for their gold-copper potential, based on multi-element lake-bottom sediment anomalies. An initial systematic till sampling program is scheduled to start mid-October 2026 on both properties, followed by a field validation phase in spring 2027. Under the agreement, Centerra can earn up to a 70% interest in the properties in two stages by delivering a Preliminary Economic Assessment (PEA) with a minimum mineral resource estimate of one million gold-equivalent ounces (1 Moz AuEq), funding cumulative exploration expenditures of $16,000,000, and making cash payments totaling up to $850,000. The properties cover a combined area of 556.3 km² (1,082 claims) over a 57 km strike length along or near the La Grande–Opinaca subprovince structural boundary. The Corvet Property consists of 623 claims over 320.4 km² and has yielded grab samples with up to 7.86% Cu and 1.83 g/t Au. The Kaanaayaa Property consists of 459 claims over 235.9 km², with grab samples from the Moly prospect returning up to 7.39 g/t Au, 3.98 g/t Ag, 0.95% Mo, 0.33% Bi, and 0.14% Cu. For the First Option, Centerra can earn an initial 51% undivided interest over four years by funding $6,000,000 in exploration expenditures and making cash payments totaling $250,000, with an initial $1,250,000 in expenditures as a firm commitment. The First Option schedule requires cumulative expenditures of $1,250,000 by Year 1, $2,500,000 by Year 2, $4,000,000 by Year 3, and $6,000,000 by Year 4, and cash payments of $50,000 on signing and $50,000 annually thereafter. A minimum of $1,500,000 in expenditures per property is required to vest an interest in that property. For the Second Option, Centerra can earn an additional 19% interest (total 70%) over six years by delivering a PEA with a minimum 1 Moz AuEq resource, incurring $10,000,000 in exploration expenditures, and making cash payments up to $600,000, with obligations of at least $1,500,000 in expenditures per year and $100,000 in cash payments per year. If Centerra does not exercise the Second Option, its interest will be adjusted to 49% and Azimut’s to 51%. Azimut will act as operator during the First Option, with Centerra assuming the role during the Second Option or electing Azimut to continue until PEA studies commence. If either partner’s interest in the joint venture is diluted below 10%, it converts to a 2% net smelter return (NSR) royalty, of which 0.5% can be repurchased for $2,000,000 (inflation-adjusted). The agreement is subject to customary closing conditions, including TSX Venture Exchange approval. Centerra currently owns or controls 13,973,647 common shares of Azimut, representing approximately 12.67% of the issued and outstanding shares, making it a related party under MI 61-101. The transaction was reviewed and approved by Azimut’s board of directors, with no director abstaining or expressing disagreement. Azimut is relying on exemptions from the formal valuation and minority approval requirements of MI 61-101. Dr. Jean-Marc Lulin (P.Geo.), President and CEO of Azimut, prepared and approved the scientific and technical information in the release. The Elmer Property’s Patwon Deposit hosts 311,200 oz Indicated and 513,900 oz Inferred gold resources.

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