The Brewer Option Agreement

According to the Fifth Amendment to the Brewer Option Agreement, dated February 20, 2024, Carolina Rush has exclusive rights to explore and purchase Brewer through December 31, 2030 on a no-cost basis, with previously required annual payments from 2025 through 2030 deferred until closing, should Rush exercise its option. Those previously required annual  payments were outlined in the Fourth Amendment of the Brewer Option Agreement as announced in the Company’s July 12, 2022 news release.

Should Rush exercise its option to purchase Brewer, the price will be determined by two components: 1) 60% of past costs incurred by SC DHEC and EPA at Brewer between 2005-2024; and 2) the pro-rated sum of deferred annual payments incurred by the Company from 2025 through 2030. Regarding the first component, Carolina Rush unofficially estimates that the government’s past costs through the end of 2024 will amount to approximately +/- US$30 million (60% of which is US$18 million), although the actual amount has yet to be confirmed by the EPA, SC DHEC and the Brewer Receiver.

The second purchase price component will be calculated on a pro-rated basis at time of closing based on terms agreed under the Fourth Amendment: no more than US$1.4 million per year for each of 2025, 2026 and 2027, and no more than US$1.5 million per year for each of 2028, 2029 and 2030, for a maximum total of US$8.7 million should Rush wait until the end of the Option Period to exercise and close. Should Rush exercise and close before the end of the Option Period, the second component of the purchase price shall be pro-rated to the quarter and year of when closing occurs.

Should Rush exercise its option to purchase Brewer, it will be required to post financial assurance at closing, which, according to EPA guidelines, can be satisfied through one of the following: Trust Funds; Letters of Credit; Surety Bonds; Insurance Policies; Corporate Financial Tests; or Corporate Guarantees ( The amount of financial assurance to be posted as part of a potential future closing has been requested by Rush but not yet confirmed by the EPA, SC DHEC and the Brewer Receiver.

The Fifth Amendment also stipulates that Rush shall abandon all exploration boreholes in a timely fashion and in accordance with SC DHEC regulations. To date the Company has capped but not yet abandoned 19 holes, totaling 5,768 meters, in order to be able to conduct downhole geophysical surveys and/or extend holes later in the program. As a result, the Fifth Amendment requires Rush to deposit US$150,000 in a Receiver-controlled escrow account within 120 days of the Fifth Amendment’s effective date (February 20, 2024). The Company will report to the Receiver and SC DHEC on a quarterly basis the updated status of borehole abandonment, after which the funds in escrow will be adjusted accordingly.


History of Brewer

Gold was first discovered at Brewer in the 1820s, as part of North America’s first gold rush. Having produced about 200,000 ounces of gold historically, most recently, from 1987-1995 Brewer produced 178,000 ounces of oxide gold from two open pits that extended to 50-metre depths. Operated by the U.K.-owned Brewer Gold Company (“BGC”), more than 12 million tons of ore and waste rock were mined from two open pits. After ceasing mining operations, BGC’s reclamation efforts from 1995-1999, guided by SC DHEC, fell short of achieving a fully reclaimed site. BGC abandoned the site in 1999, leaving SC DHEC and the EPA to manage the site, finalize reclamation, and treat acid-mine drainage until today.

In 2005, the Brewer site was designated a US EPA Superfund site as per the Comprehensive Environmental Response, Compensations and Liability Act (“CERCLA”) due to water quality threats. BGC’s abandonment of the property left SC DHEC and EPA with no options for addressing water quality threats from the site other than using the CERCLA response actions funded by EPA and SC DHEC. Both entities retained access to the property for purposes of constructing, operating and maintaining the wastewater treatment plant and otherwise carrying out the CERCLA remedy. With the wastewater treatment addressing potential environmental risks, in 2019, SC DHEC, through a South Carolina court, appointed the Brewer Gold Receiver (a legal construct similar to a trustee) to facilitate the leasing, sale or other use or disposition of the abandoned property, including potential renewal of mineral exploration and mining development.

In January 2020, Carolina Rush (formerly known as Pancontinental Resources) emerged as the chosen entity, through a competitive process, to explore and purchase the former Brewer Gold Mine Property (see Company news releases dated January 15, 2020, March 2, 2020, April 22, 2020, March 23, 2022, and July 12, 2022).