Orex Minerals Inc. has signed a non-binding letter of intent ("LOI") with Canasil Resources Inc. and Pan American Silver Corp. through its subsidiary Plata Panamericana SA de CV ("Pan American") to advance exploration in the Sandra Escobar Mining Camp, northern Durango State, Mexico. The interests of the parties are currently governed by separate agreements.

Pan American and Canasil entered into an option agreement dated March 24, 2009, pursuant to which Canasil earned a 40% interest in the Escobar Property with the remaining 60% interest held by Pan American. On September 15, 2015, Canasil and Orex entered into an option agreement under which Orex completed the required conditions to earn a 55% interest in Canasil's interest in the project such that Orex and Canasil agreed to proceed as a joint venture, of which Orex will have a 55% interest, and Canasil will have the remaining 45% interest (the "Orex Canasil JV"). The obligations of the parties under the LOI are subject to the parties entering into a definitive agreement that reflects the terms of the LOI.

Under the terms of the LOI: The Orex-Canasil JV will grant to Pan American an undivided 10% interest in the Sandra Property; During the four years after the effective date of the definitive agreement (the "Earn-In Period"), Pan American will have the right to earn an additional 41% undivided interest in the Sandra Property by contributing an aggregate amount of USD 5 million toward the operations on both properties, of which USD 2 million will be required within the initial two years of the Earn-In Period; Should Pan American choose not to continue during the Earn-In Period, the initial 10% interest in the Sandra Property granted to Pan American would revert back to the Orex-Canasil JV; Also during the Earn-In Period, the Orex-Canasil JV will have the right to earn an additional 9% undivided interest in the Escobar Property by contributing an aggregate amount of USD 1 million toward the operations on both properties. Transfer of this 9% interest in the Escobar Property will only take place once both the Pan American contribution and the Orex-Canasil JV contribution are made in full; Upon completion of all required financial contributions by all parties, Pan American will hold an undivided 51% interest and the Orex-Canasil JV will hold an undivided 49% interest in the Escobar and Sandra properties; If Pan American elects to further advance the properties by completing a pre-feasibility study, each party's respective interest will be adjusted at the completion of the pre-feasibility study, such that Pan American will hold an undivided 60% interest and the Orex-Canasil JV will hold the remaining 40% interest in the Escobar and Sandra properties; and During the term of the definitive agreement, a "Technical Committee" will be formed consisting of representatives from each party. This committee will review and recommend exploration programs. The Orex-Canasil JV will be the operator under the agreement.