Puget Ventures Signs MOU with China Aluminum International Engineering Corporation

PUGET VENTURES INC. announces that it has accepted the recommendation of Anhua to sign an MOU with China Aluminium International Engineering Corporation Limited ("CHALIECO") as EPC contractor to develop the Karakul Cobalt Project ("Karakul") in Altai, Russia upon completion of the Company's previously-announced acquisition of Pafra Enterprises Company Limited ("Pafra"). CHALIECO is a subsidiary of China Aluminum Corporation (CHINALCO).

The potential engagement of CHALIECO results from the previously-announced MOU between the Company and Anhua. Pursuant to that MOU, Anhua was entitled to select an EPC contractor for the Karakul project agreeable to the Company, and will arrange the financing for the engagement of such EPC contractor, subject to the Company issuing common share purchase warrants to Anhua, and providing security with respect to such financing in the form of a pledge of the mining rights underlying the Karakul project or the shares of the Russian entity holding such rights. The formal terms of such arrangement will be finalized in a definitive agreement between the parties. Anhua has nominated CHALIECO, a premier Chinese contractor, who has been selected to render technical and construction services for the development of the Karakul project. The partnership between Anhua and the Company remains subject to numerous conditions, including but not limited to the parties entering into aforementioned definitive agreement, and the Company's completion of its acquisition of Pafra.

The Karakul project is beneficially owned by Pafra. As previously announced, the Company is proceeding with its acquisition of all of the issued and outstanding securities of Pafra, which is subject to numerous conditions. There is no guarantee or assurance that the Company will complete such acquisition.

On completion of the Pafra acquisition, Puget Ventures and CHALIECO will work towards the development of the Karakul Cobalt Project in accordance to a preliminary plan of action, which will include, amongst other items, a scoping level technical proposal and analysis and, given favourable findings, a bankable feasibility study. Subject to positive bankable feasibility study and project finance through Anhua, CHALIECO will proceed in role as EPC contractor for the project construction and commissioning.

CHALIECO, a wholly owned subsidiary of CHINALCO, will provide services for Karakul Project, covering project feasibility study, technical consultation, engineering, equipment and material procurement, project construction, general project contracting, project management service and technical service.

CHALIECO has strong technical expertise in the non-ferrous metal area and also has the Changsha Non-Ferrous Metallurgy Design and Research Institute Company Limited, a design institute that is specialized in cobalt mining and processing. CHALIECO has EPC experience in China, Mongolia, Kazakhstan, Kyrgyzstan, India, among other countries.

CHALIECO has a history of more than 50 years, and currently over 14,000 employees.

"Puget is pleased to partner with a first-class international engineering corporation as progressive as CHALIECO on the Karakul Project," said Erin Chutter, President and CEO of Puget Ventures. "We are also delighted with CITIC Anhua in its ability to mobilize a senior contractor with exceptional expertise. This emphasizes the Company's determination to partner with experienced industry groups and establish itself as a leader in the cobalt space."