January 11, 2018 —

On Thursday, January 11, Oriana Resources Corporation (CVE:OUP.H), which is based in Vancouver, British Columbia, and Hut 8 provided the public with an update about their announced business integration and the Proposed Qualifying Transaction.

Further, the two companies, one of which is a private corporation included under the Business Corporations Act (Hut 8), also provided an update on connected financial activities, such as Hut 8 closing a private placement offering of common shares priced at $2.50 per common share for gross proceeds of $38.0M on December 20th of last year.

Not only that, Oriana Resources Corp. and Hut 8 Mining Corp. also disclosed an update on the forthcoming launch by Hut 8 of a private placement offering of subscription receipts of the company (deemed the “Subscription Receipts”) priced at $5.00 per Subscription Receipt for forecasted gross proceeds of roughly $70.0M (deemed the “Second Offering”).

Before the Proposed Qualifying Transaction is finalized, and by using the money raised from both the First and Second Offering, Hut 8 Mining Corp. is forecasted to have acquired – or at the very least have carried out purchase orders – a grand total of 57 separate proprietary BlockBox Data Centers from Bitfury Holding BV. This is a company that is embodied under laws that stem from the Netherlands.

The reason Hut 8 Mining Corp. would want to acquire the BlockBox Data Centers is that they hope to be able to run assorted cryptographic hash functions connected to the mining of cryptocurrency. If this were to happen, BlockBox Data Centers could be placed on land that is leased by Hut 8 Mining Corp. in Drumheller, Alberta.

If you hadn’t already guessed, Hut 8 Mining Corp. acquiring the BlockBox Data Centers is in accordance with a master data center purchase contract that was carried out by Hut 8 Mining and Bitfury back in November of last year. Essentially, the agreement outlines an exclusive contractual relationship between the two companies regarding the BlockBox Data Centers supplied by Bitfury Holding BV within the region of North America.

The agreement between the two parties will be beneficial for both, providing the Netherlands-based company with a fully-managed service allowing Bitfury to shape, steer, and sustain the BlockBox Data Centers 24/7.

When asked about the Proposed Qualifying Transaction, as well as the favorable outcome of the First Offering, Interim CEO of Hut 8 Mining, Sean Clark, stated that the outcome of the First Offering illustrates just how excited the marketplace is for the company. Further, he added that even though the Proposed Qualifying Transaction has been pretty under-wraps, and out of reach to investors, its partnership with Bitfury will allow for it to roll out the most substantial cryptocurrency mining projects North America has ever seen.

 

What Does the Proposed Qualifying Transaction Entail?

On December 21 of last year, Oriana Resources posted a news release in which it was stated that the Proposed Qualifying Transaction will be executed in respect to the terms outlined in a LoI between Oriana Resources and Hut 8 Mining as well as the terms outlined in the Definitive Agreement.

Keep in mind the two companies are still working towards finalizing a Proposed Qualifying Transaction agreement, and the agreement is forecasted, if all goes as plan, to be signed prior to the Second Offering closing.

Additionally, the two parties have made considerable progress in regards to due diligence, the drafting stage of a filing statement in respect to the policies outlined by the TSX Venture Exchange, and the finalization of audited and pro forma financial statements of Hut 8 Mining Corp.

The most important thing to understand about the Proposed Qualifying Transaction is that it will be constructed as what the parties are calling a “three-cornered amalgamation.”

After the Proposed Qualifying Transaction is closed, the following is forecasted to occur:

1) Oriana will undergo a name change, taking on the new title of Hut 8 Mining Corp.

2) Each and every common share of Hut 8 will be terminated, and anyone who is a holder of common shares of Hut 8 will be the recipient of one Oriana Common Share for each and every Hut 8 common share that they hold.

3) Oriana will amalgamate all of the outstanding common shares of Oriana and the then issue common shares on the basis of roughly forty-three to one

4) Oriana Subco and Hut 8 will be integrated under the British Columbia Business Corporations Act, and will then work as one single unit (named Amalco). After that, Amalco will become a 100% owned subsidiary of Oriana.

 

As for the business side of the Resulting Issuer, the main goal is to maintain the business of Hut 8 by creating an immensely popular Blockchain company. How? By developing and owning cryptocurrency mining framework as well as other Blockchain businesses.

As long as the Second Offering and the Proposed Qualifying Transaction is completed, the Resulting Issuer will hold 83,980 outstanding common shares. The largest shareholder – holding roughly 43.1% – will be Bitfury. As for Oriana shareholders, they will take control of a sum of 222,000 common shares of the Resulting Issuer. Meanwhile, anyone who is a previous Hut 8 shareholder will receive a total of 33,600,000 common shares.

Last but not least, the final makeup of the Proposed Qualifying Transaction will need to have approval by the TSX Venture Exchange, and the Proposed Qualifying Transaction will be liable to be subjected to satisfactory tax as well as corporate and securities law advice on the part of each party involved.

If the Proposed Qualifying Transaction is completed, the Resulting Issuer will then be eligible to emerge into an investors rights agreement with Bitfury, who will be, as mentioned, the largest shareholder. As for Bitfury, the organization will be eligible to various customary director nominations as well as pre-emptive rights, such as the right to subscribe, on a suggest issuance or distribution by the Resulting Issuer. That being said, it is important to mention that if Bitfurys’ interest in ownership in the Resulting Issuer drops below the 10% mark, pre-emptive rights will be discarded.

 

How will the Proposed Qualifying Transaction Get Completed?

In order for the transaction to be completed, it has to check off a number of boxes. For starters, the Second Offering has to be closed, the BlockBox Data Centers, as previously mentioned, have to be acquired, and the Debt Conversion will also need to be completed.

But, there’s more as well. The Proposed Qualifying Transaction will also have to receive applicable regulatory approvals (such as the approval from the TSX Venture Exchange) and complete adequate due diligence, which they seem to be on their way to completing.

Next month, Oriana is forecasted to hold a meeting of its shareholders in order to get the seal of approval for the Consolidation. It’s not all on Oriana however. Anyone who is a shareholder of Hut 8 is forecasted to summon a meeting towards the start of next month in order to give the greenlight for the Amalgamation.

Meanwhile, the TSX Venture Exchange received a request for a waiver detailing the requirements of sponsorship of Policy 2.2, however, as of right now, there is no guarantee that this waiver will be yielded.

It is also worth mentioning that before the Closing, it is forecasted that roughly $200,000 of the $236,000 existing debt owing to counsel to Oriana will need to be purchased by a separate party. Once it has been acquired by one or more parties, the debt will need to be converted into Oriana Common Shares that are based solely on a $5.00 conversion price.

 

What Have Investors Been Told About the Proposed Qualifying Transaction?

Like with anything, investors need to be in the loop regarding what is going on in the world. In the case of the Proposed Qualifying Transaction, investors have been warned that any information that has been released regarding the transaction should not be considered to be entirely complete or 100% accurate. Therefore, investors have been cautioned not to rely entirely upon the information they see.

That said, it’s going to be important to keep an eye on what’s going on surrounding the Proposed Qualifying Transaction as there will be a Filing Statement regarding the Proposed Qualifying Transaction put forward on SEDAR no longer than a business week leading up to the Closing of the Proposed Qualifying Transaction. After the Filing Statement has been filed and put away for safekeeping, a press release will be then be sent out to the public.

Also worth mentioning is that the TSX Venture Exchange has neither given the seal of approval of the contents of this press release, nor has it disapproved it.

Interestingly, the Proposed Qualifying Transaction is a transaction that does not require  shareholders to give the green-light, unless the TSX Venture Exchange personally comes out and says so.

After the Proposed Qualifying Transaction is completed, the Resulting Issuer is forecasted to check off all of the public distribution requirements of a Tier 1 issuer in respect to the requirements of the TSX Venture Exchange.

 

What Should You Know About the First Offering and the Second Offering?

First Offering

Let’s start with the First Offering, just to make it easier on our brains to understand all that surrounds the financial aspect of this transaction.

Towards the end of last month, Hut 8 Mining Corp. finalized the First Offering, consisting of 15,200,000 Hut 8 Common Shares valued at $2.50 per Hut 8 Common Share for gross proceeds of $38.0M. This is made up of $12,575,607 in Bitcoin, a digital currency, and $25,424,392 in cash.

As for the brokered segment of the First Offering, this was completed in accordance with an agency agreement that was put forth on December 20 between Hut 8 and GMP Securities L.P.

So what will the gross proceeds be used for? Well, they will be used to finance Hut 8’s purchase of 22 BlockBox Data Centers from Bitfury Holding in accordance to the Master Purchase Agreement. It will also be used to satisfy various working capital requirements.

In connection with the First Offering, there were an aggregate of 714,000 Hut 8 broker warrants that were sent to GMP Securities L.P. linked with the First Offering. After the First Offering closing date, every Hut 8 Broker Warrant can be used to subscribe for and buy one Hut 8 Common Share at a price of $2.50, but only for a 24 month timeframe.

 

Second Offering

As for the Second Offering, this is forecasted to start this month, around the week of the 15th, so keep your eyes peeled as that is only 3 days away. The Second Offering will consist of a brokered private placement of Subscription Receipts, priced per Subscription Receipt of $5.00 for roughly $70.0M of gross proceeds.

In respect to the Proposed Qualifying Transaction, anyone who is a holder of Hut 8 Common Shares will be eligible to receive a Resulting Issuer common share. The catch? In order to receive the one common share, you will have to exchange each Hut 8 Common Share that you hold.

Further, it is worth adding that Hut 8 has acquired the services of GMP Securities L.P. for the Second Offering. As a result, it is forecasted that all of the money that stems from the Second Offering will go towards financing various Purchase Orders for the surviving BlockBox Data Centers in accordance with the Master Purchase Agreement. It is also expected that the proceeds will go towards transaction costs and working capital purposes.

On the date of the closing for the Second Offering, any gross proceed from the offering will be sent to – and then held onto – the Subscription Receipt Agent. Then, it will be invested in what is called an interest bearing account.

In regards to the balance of GMP Securities L.P.’s fees, these will be sent to the organization stemming from the Escrowed Funds (which are Escrowed Proceeds, combined with interest and various other income that is earned). Further, the Escrowed Funds balance will be set free from escrow to Hut 8 Mining so long as all the below mentioned conditions are met with satisfaction before the date of termination:

1) Hut 8 and Oriana will have to provide written confirmation that all of the previously mentioned requirements of the Proposed Qualifying Transaction have been met or waived. Further, the parties will have to confirm that the Proposed Qualifying Transaction will be finalized after the Escrowed Funds are released

2) For the Proposed Qualifying Transaction, the receipt of shareholder and regulatory approvals are compulsory.

3) All of the conditions precedent to the Proposed Qualifying Transaction closing will need to be completed or waived.

4) The Resulting Issuer Shares will have to be approved for TSX Venture Exchange listing

5) GMP Securities L.P. and Hut 8 will have to send out a notice of release

Worth mentioning as well is that the Escrow Release date, which is the date that the Escrow Release Conditions are fulfilled, will be no later than ninety days after the Second Offering is completed. However, if the conditions are not in fact fulfilled before the date of termination, all of the Second Offering proceeds will be given back pro rata to Subscription Receipts holders. Further, the Subscription Receipts, if this were to happen, will be terminated.

The Second Offering is thought to close during the first week of February, and it will depend entirely on the receipt by GMP Securities L.P. of carried out lock-up agreement from any Hut 8 shareholder that has more than 10% of the Common Shares and every director and executive officer of Hut 8.

 

Additional Important Information

Below is a table that lays out various pro forma financial information of the Resulting Issuer after giving the greenlight to the Proposed Qualifying Transaction and the Second Offering.

Keep in mind these unaudited pro forma financial accounts are based strictly on assumptions and do not entirely reflect the Resulting Issuer’s financial position.

 

Pro Forma (as at September 30 of last year) after giving way to the Proposed Qualifying Transaction and the Second Offering

Balance Sheet

A) Current Assets = $24,795,886

B) Long-Term Assets = $128,625,000

C) Current Liabilities = $362,880

D) Shareholders’ Equity = $153,058,006

 

Directors, Officers and Insiders of the Resulting Issuer

Concurrent with the completion of the Proposed Qualifying Transaction, it is expected that all directors and officers of Oriana will resign and be replaced by Hut 8 nominees. The directors, officers and insiders of the Resulting Issuer are expected to be the following:

Valery Vavilov (Director)

Valery Vavilov is the Chief Executive Officer and founder of BitFury Group Limited, the world’s leading full service Blockchain company. Mr. Vavilov’s entrepreneurial experience and passion for Blockchain technology led him to found the BitFury Group Limited in 2011, when Blockchain technology was just beginning to capture the world’s attention and imagination. A native Latvian who experienced first-hand the challenges resulting from the collapse of the Soviet Union, Mr. Vavilov was inspired by Blockchain technology and saw an opportunity to build technological solutions that could improve the lives of people all over the world. Mr. Vavilov focused first on the hardware solutions that would ensure security and trust in the Blockchain, leading Bitfury Group Limited to develop five generations of cutting-edge mining chips and state-of-the-art data center designs. Under his leadership, the BitFury Group Limited has expanded its focus to provide custom-designed software, consulting solutions, and advanced hardware, all while maintaining its position as one of the major public Blockchain security and transaction providers. Prior to founding Bitfury Group Limited, Mr. Vavilov spent more than 15 years in a variety of technical and leadership positions. He received his MS from the Transport & Telecommunication Institute in Latvia.

Bill Tai (Director)

Bill Tai is a member of the board of directors of Bitfury and a co-founder and chairman of data science company Treasure Data, Inc. He was an early seed investor behind high profile startups Canva, Color Genomics, Tweetdeck/Twitter, Wish.com and Zoom Video. Mr. Tai is a Partner Emeritus at CRV, a venture capital firm. Previously, he founded several successful technology companies and served as a director of seven publicly listed companies. He holds a BSEE with Honors from the University of Illinois and an MBA from Harvard University.

Michael Novogratz (Director)

Michael Novogratz is the Chief Executive Officer of Galaxy Group Investments LCC, a private investment company. He was formerly a principal and a member of the board of directors of Fortress Investment Group LLC and Chief Investment Officer of the Fortress Macro Fund. Mr. Novogratz joined Fortress in 2002 after spending 11 years at Goldman Sachs Group, Inc., where he was elected partner in 1998. Mr. Novogratz founded and serves as the Chairman of the board of directors for Beat the Streets, a non-profit organization which builds wrestling programs in New York City public schools and is also the Honorary Chairman of USA Wrestling Foundation. Mr. Novogratz is Chairman of The Friends of the Hudson River Park. He also serves on the board of the Acumen Fund, NYU Langone Medical Center, Princeton Varsity Club and The Jazz Foundation of America. Mr. Novogratz received an AB from Princeton University in Economics, and served as a helicopter pilot in the US Army.

Dennis Mills (Director)

Dennis Mills is the Founder and President of Toronto Partners Inc. Since 2013, Mr. Mills has served as a director of CGX Energy Inc. and was a director of Pacific Rubiales Energy Corp. from 2012 to 2016. Mr. Mills was Vice Chairman and Chief Executive Officer of MI Developments Inc. from 2004 to 2011, and a Vice-President at Magna International from 1984 to 1987. Mr. Mills served as a Member of Parliament in Canada from 1988 to 2004. While a Member of Parliament, Mr. Mills was Parliamentary Secretary to the Minister of Industry from 1993 to 1996, the Parliamentary Secretary to the Minister of Consumer and Corporate Affairs from 1993 to 1995 and the Chair of the Committee studying the Industry of Sport in Canada. Mr. Mills was the Senior Policy Advisor to the Cabinet Committee on Communications (1980-1984), Advisor to the Minister of Energy (1980-1981), Senior Advisor to the Minister of Multiculturalism (1980) and Senior Communications Advisor to the Prime Minister of Canada, The Right Honourable Pierre Elliott Trudeau (1980-1984).

Jeffrey Mason (Director)

Jeffrey Mason is a Chartered Professional Accountant (CPA) and holds an Institute of Corporate Directors (ICD.D) designation. Mr. Mason has over 25 years of public company experience in exploration, development, construction and operation for gold, silver, copper, nickel, lead, zinc, platinum group metals and diamond projects in the Americas, Asia and Africa. In 2004, he was awarded the BC Ernst & Young Entrepreneur of the Year Award in the Natural Resources category. He has expertise in exploration, construction and operations reporting, budgeting and financial systems, mergers and acquisitions, corporate finance, regulatory reporting, and corporate governance including 15 years (1994-2008) as a Principal and Chief Financial Officer of Hunter Dickinson Inc., which included experience as Chief Financial Officer, Corporate Secretary and a director for 15 public companies listed on the TSX, the TSXV and NYSE MKT. For 8 years, Mr. Mason served as director and audit chair of TSX/NASDAQ-listed, Coastal Contacts Inc., an online e-retailer with annual sales of over $220,000,000 and 650 employees until its sale in May 2014 to Essilor International for $450,000,000. He began his career with Deloitte LLP as a Chartered Professional Accountant, followed by six years at Barrick Gold Corporation in mineral exploration, construction and operations reporting. Mr. Mason served as Chief Financial Officer of Wellgreen Platinum Ltd. from November 2012 to July 2016 and board director from November 2013 to September 2015. Mr. Mason served as director and audit chair from May 2014 to June 2017, and is now an independent board advisor of Great Panther Silver Limited, (TSX/NYSE MKT) a precious metals mines operator in Mexico and Peru, director and audit chair of Red Eagle Mining Corporation (TSX) since January 2010, a gold producer in Columbia, director of Amarc Resources Ltd. (TSXV) since September 1995, director and audit chair of Torq Resources Inc. (TSXV) since September 2017, and director and audit chair of Libero Copper Corporation (TSXV) since August 2008.

Gerri Sinclair (Director)

Gerri Sinclair’s career includes more than 25 years’ experience in mobile and digital media technologies, entrepreneurial business, and government policy. She was the founder and CEO of NCompass Labs, the Internet digital content management company acquired by Microsoft in 2001. Dr. Sinclair then joined the Microsoft Senior Executive team as Country Manager for Canada for MSN. A former IBM Consulting Scholar as well as a Visiting Scientist at IBM Research in New York, Dr. Sinclair was also the first President of the British Columbia Government Premier’s Technology Council, and the founding director of the ExCITE lab at Simon Fraser University, the first digital media technology R&D centre in Canada. She holds a Ph.D. in Renaissance drama as well as an honorary Doctor of Science in Computing Science from the University of British Columbia. Dr. Sinclair also serves as a Senior Innovation Strategist at Ryerson University in Toronto, and at Telefonica’s Advanced Multimedia Research Lab in Barcelona, Spain. In addition to being a member of the Toronto Montreal Stock Exchange board of directors (TMX), she is currently a director of the Vancouver Airport Authority (YVR), as well as on the board of directors of ThinkData, a small Toronto-based start-up in the field of Big Data.

Sean Clark (Interim Chief Executive Officer)

Sean Clark is co-founder and Chief Executive Officer of Hut 8 and co-founder and director of First Block Capital Inc., Canada’s first fully-regulated cryptocurrency investment firm. Mr. Clark is also co-founder and director of First Coin Capital Corp, an international ICO advisory firm. Mr. Clark founded SHOEme.ca in 2012, which was sold in 2014 to Shoes.com, where he held the title of Chief Revenue Officer and helped the company achieve $300 million in annual revenue. Mr. Clark received his MBA from the University of British Columbia and was the winner of the 2016 EY Entrepreneur of the Year award.

Kyle Appleby (Interim Chief Financial Officer)

Kyle Appleby is Interim Chief Financial Officer of Hut 8. Since 2007, Mr. Appleby has been providing Chief Financial Officer services to a number of public and private companies both domestic and international. He has focused on assisting companies with financial reporting and controls, governance, operations, regulatory compliance and taxation. Prior to 2007, Mr. Appleby worked for several public accounting firms in Canada. He is a member in good standing of the Chartered Professional Accountants of Canada and the Chartered Professional Accountants of Ontario.

Insiders

Upon completion of the Proposed Qualifying Transaction, Bitfury is expected to be an insider of the Resulting Issuer by virtue of it beneficially owning or controlling, directly or indirectly, more than 10% of the issued and outstanding shares of the Resulting Issuer. Bitfury is controlled by Valery Vavilov, a resident of Tbilisi, Georgia.

About Oriana

Oriana was incorporated under the BCBCA on June 9, 2011. The Company is listed as a capital pool company on the NEX board of the TSXV. The Oriana Common Shares were listed for trading on the TSXV on October 3, 2012 and commenced trading at the opening of trading on October 4, 2012 under the symbol “OUP.P” (and now listed on the NEX board of the TSXV under the trading symbol “OUP.H”). In accordance with Policy 2.4, Oriana’s principal business has been to identify and evaluate assets or businesses with a view to consummating a Qualifying Transaction subject to acceptance by the TSXV. Trading in the Oriana Common Shares is currently halted pending completion of the Proposed Qualifying Transaction.

About Hut 8

Hut 8 was incorporated under the BCBCA on November 15, 2017. Hut 8 is a cryptocurrency mining and Blockchain infrastructure company established through an exclusive partnership with the Bitfury Group, the world’s leading full-service Blockchaintechnology company. Hut 8 currently owns bitcoin mining datacenters representing 24.2 MW and 165 PH/s that are in operation or construction, with a pipeline of acquisition and development opportunities across North America. Through its partnership with the Bitfury Group, Hut 8 has access to a proprietary mix of hardware, software, and operational know-how to construct, optimize, and manage datacenters in low-cost and attractive jurisdictions. Hut 8 is led by a team of industry experts and intends to provide investors with exposure to Blockchain processing infrastructure and technology along with underlying cryptocurrency rewards and transaction fees.

Forward-Looking Statements:

When used in this press release, the words “estimate”, “project”, “belief”, “anticipate”, “intend”, “expect”, “plan”, “predict”, “may” or “should” and the negative of these words or such variations thereon or comparable terminology are intended to identify forward-looking statements and information. Although the Oriana and Hut 8 believe, in light of the experience of their respective officers and directors, current conditions and expected future developments and other factors that have been considered appropriate, that the expectations reflected in the forward-looking statements and information in this press release are reasonable, undue reliance should not be placed on them because the parties can give no assurance that such statements will prove to be correct. The forward-looking statements and information in this press release include information relating to the business plans of Oriana and Hut 8, the Proposed Qualifying Transaction (including the closing of the Second Offering as well as the acquisition by Hut 8 of, or the execution of the Purchase Orders for the acquisition of, the BlockBox Data Centers, the Debt Conversion and the Amalgamation) and the officers, directors and insiders of the Resulting Issuer upon completion of the Proposed Qualifying Transaction. Such statements and information reflect the current view of Oriana and/or Hut 8, respectively. Risks and uncertainties that may cause actual results to differ materially from those contemplated in those forward-looking statements and information.

By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or other future events, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the following risks: (a) there is no assurance that Oriana and Hut 8 will obtain all requisite approvals for the Proposed Qualifying Transaction, including the approval of the TSXV for the Proposed Qualifying Transaction (which may be conditional upon amendments to the terms of the Proposed Qualifying Transaction); (b) following completion of the Proposed Qualifying Transaction, the Resulting Issuer may require additional financing from time to time in order to continue its operations and financing may not be available when needed or on terms and conditions acceptable to the Resulting Issuer; (c) new laws or regulations could adversely affect the Resulting Issuer’s business and results of operations; and (d) the stock markets have experienced volatility that often has been unrelated to the performance of companies. These fluctuations may adversely affect the price of the Resulting Issuer’s securities, regardless of its operating performance. There are a number of important factors that could cause Oriana and Hut 8’s actual results to differ materially from those indicated or implied by forward-looking statements and information. Such factors include, among others: currency fluctuations; limited business history of the parties; disruptions or changes in the credit or security markets; results of operation activities and development of projects; project cost overruns or unanticipated costs and expenses; and general market and industry conditions. The parties undertake no obligation to comment on analyses, expectations or statements made by third parties in respect of their securities or their respective financial or operating results (as applicable).

Oriana and Hut 8 caution that the foregoing list of material factors is not exhaustive. When relying on the parties’ forward-looking statements and information to make decisions, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. The parties have assumed that the material factors referred to in the previous paragraph will not cause such forward-looking statements and information to differ materially from actual results or events. However, the list of these factors is not exhaustive and is subject to change and there can be no assurance that such assumptions will reflect the actual outcome of such items or factors. The forward-looking information contained in this press release represents the expectations of the parties as of the date of this press release and, accordingly, are subject to change after such date. The parties do not undertake to update this information at any particular time except as required in accordance with applicable laws.

All amounts referred to herein are in Canadian dollars unless otherwise indicated.

There can be no assurance that the Proposed Qualifying Transaction will be completed as proposed or at all.

This press release is not an offer of the securities for sale in the United States. The securities have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an exemption from registration. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release.