Lancaster Resources Inc. (CNSX:LCR) announced that further to the Spin-Off Agreement announced on January 2, 2024, the Company has entered into an arrangement agreement dated January 29, 2024 (the 'Arrangement Agreement') which outlines the terms and procedures for a plan of arrangement with its wholly owned subsidiary Nelson Lake Copper Corp. ('Nelson Lake') whereby the Company intends to spin off the majority of its holdings in Nelson Lake by issuing a stock dividend of Nelson Lake common shares to Lancaster shareholders. The transaction will be carried out by way of a statutory plan of arrangement (the 'Spin-Off') pursuant to the Business Corporations Act (British Columbia).

Through the Spin-Off, shareholders of the Company will receive a stock dividend of Nelson Lake shares at a ratio of 0.02 Nelson Lake Shares for every Lancaster share owned (the 'Stock Dividend') as of the record date of February 5, 2023 (the 'Record Date'). There will be no change in Lancaster security holders' ownership in Lancaster securities as a result of the Spin-Off. Holders of warrants, options, or other convertible securities in Lancaster will not be entitled to receive the Stock Dividend.

Only holders of common shares of Lancaster as of the Record Date will be eligible to receive the Stock Dividend. The proposed Spin-Off will be subject to the terms of the Arrangement Agreement and the approval of Lancaster shareholders at an annual general and special meeting of shareholders on March 15, 2023 (the 'Meeting'). The Spin-Off will also require the approval of the British Columbia Supreme Court.

Full details of the Spin-Off, Nelson Lake, and the Nelson Lake Copper Project will be included in an information circular which will be distributed to Lancaster shareholders in advance of the Meeting. Following the Spin-Off, Nelson Lake will be an unlisted reporting issuer in British Columbia, Alberta, and Saskatchewan and will seek to raise financing and look for potential merger or acquisition targets to strengthen its business and potentially seek a listing on a stock exchange. Immediately after the Spin-Off, the Company will continue to own approximately 750,000 shares of Nelson Lake, which will be approximately 43% of the outstanding shares of Nelson Lake.