It is anticipated that the OLIA will be finalised in the third quarter of 2021. The agreement in principle outlines the terms to be included in the OLIA which will establish the framework to govern Falco's development and operation of its Horne 5 project. This includes the creation of technical and strategic committees, comprised of both Glencore and Falco representatives, to collaborate in the successful and safe development and operation of the Horne 5 project. Glencore will also appoint a representative on Falco's board, while Falco will receive rights of access, use and transformation rights.

The concentrate will be processed at Glencore's Horne smelter, which is located adjacent to Horne 5, and Glencore will receive financial assurance, including guarantees and indemnification, to cover risks to its copper smelting operations.

In October 2020, Falco entered into agreements with Glencore Canada on bridge financing and base metals offtake for Horne 5, and this will also form part of the final OLIA.

Since November 2020, Glencore and Falco have conducted an intensive work programme to address concerns and mitigate potential risks of the Horne 5 project to the Glencore operations. The key components of the work programme were established by Glencore after a complete due diligence review of the Horne 5 project by their technical teams.

The work programme has a budget of approximately C$7.5 million (US$6.1 million), which was largely financed through the proceeds of the convertible debenture financing made available by Glencore to Falco in October 2020.

The work programme was managed by a joint technical committee between Glencore and Falco and addressed key components, such as geotechnical advancement (e.g. drilling investigation, crown pillar stability, seismicity potential, backfill characterisation); water management of the Horne 5 project; and synergies between the Horne 5 project and the Horne smelter.

Falco and Glencore have now successfully addressed the majority of the key components, including the backfilling of old underground workings to secure certain crown pillars at the Horne smelter, and will continue to collaborate to finalise the current work programme. The companies are working to mitigate risk factors for the Horne smelter's operation and are in agreement on the path forward towards the dewatering phase of the Horne 5 project.

Discussions between the companies have accelerated since the start of the Glencore work programme and the signing of the concentrate agreements. Falco stated that this is a major step forward into the final phase of negotiations of the OLIA, which will establish the terms upon which Falco will be granted the right to proceed with its Horne 5 project development and operation.

Luc Lessard, president and CEO of Falco, noted: "This agreement is a major milestone for the development of the Horne 5 project that we have been working towards over the last five years. It is the culmination of an extensive technical and strategic collaboration between Falco and Glencore and, together with the significant advancement of the work programme, has enabled the parties to build the foundation for the OLIA.

"The work programme has achieved its objective to identify and mitigate the potential risks to the Horne smelter, in addition to strengthening our partnership and relationship with Glencore. I am confident that the parties will be successful in finalising the OLIA within the expected timeframe."

Aline Coté, global zinc and lead industrial lead at Glencore, and Claude Bélanger, chief operating officer of Glencore's North American copper assets (including the Horne smelter and CCR refinery), commented: "This agreement represents a milestone towards the development of Falco's Horne 5 project. We are very pleased with the work accomplished over the past 10 months and the strong working relationship that has developed between Falco and Glencore.

"Copper produced at Horne 5 and processed through Glencore's integrated Quebec Copper Operations will be some of the greenest and lowest-carbon footprint copper in the world. While it is impossible to eliminate all of the risks inherent with having two such operations in close proximity, Glencore is confident that with the work done to date, our strong relationship and the successful completion of the OLIA, an alignment of interests will have been achieved and a path to success for the Horne 5 project will have been set out."