Avesoro Resources Inc. Proposed Acquisition of the Youga Gold Mine and Balogo Gold Mine from Avesoro Jersey Limited

And Placing of New Common Shares to raise approximately £15.2 million and Broker Option

TORONTO, Oct. 31, 2017 - Avesoro Resources Inc. (AIM:ASO / TSX:ASO) ("Avesoro" or the "Company"), is pleased to announce that it has entered into a conditional agreement to acquire the Youga Gold Mine and Balogo Gold Mine (the "Assets") in Burkina Faso through the acquisition of the entire issued share capital of MNG Gold Burkina SARL, Cayman Burkina Mines Ltd., MNG Gold Exploration Ltd., aaa Exploration Burkina Ltd. and Jersey Netiana Mining Ltd. and their subsidiaries (the "Acquired Entities" which collectively hold the Assets) from Avesoro Jersey Limited ("Avesoro Jersey"), a related party being the majority (73.5%) shareholder of the Company, for a total consideration of US$69.5 million (the "Acquisition"). The Company has today conditionally raised approximately £15.2 million (approximately US$20.0 million) through a placing of new Common Shares in the Company ("Placing Shares") to new and existing sophisticated and accredited investors at a placing price of 1.9 pence per Placing Share (the "Placing Price") (the "Placing"). Of the proceeds from the Placing, US$18.5 million will be used to fund the cash component of the Acquisition consideration and the remainder will be used for general working capital purposes. Up to a further US$2.5 million (gross) may be raised for working capital purposes by way of a Broker Option (the "Broker Option"), as determined by the Brokers, which will remain open for exercise by the Brokers until 5.00 p.m. London Time on 31 October 2017.

Highlights of the Acquisition

Consideration

• US$69.5 million acquisition consideration to be funded through:
• • US$51.0 million of Common Shares issued to Avesoro Jersey at the Placing Price being 2,033,492,822 new Common Shares ("Consideration Shares"); and
  • US$18.5 million of cash raised via the Placing.

Strategic

• Transformational acquisition for the Company which will add two producing mines to the Company's portfolio;
• The transaction will simplify the management structure by bringing two mines into the Company from the wider Avesoro Jersey group. Following the Acquisition, Avesoro Jersey's shareholding in the Company will remain at approximately 73 per cent.;
• Positive diversification of project and country risk;
• Significant exploration upside added to the Company's portfolio; and
• Continuation of the Company's long-term plan to become a premier mid-tier African gold producer.

Operational

• Increases forecast proforma 2017 gold production to 180-190koz;
• Proforma 2017 year to date cash costs of US$660/oz;
• Increases forecast combined gold production for 2018 by approximately 60% to 230koz;
• Assets being acquired at attractive valuation of 0.57x NAV¹;
• Assets already well understood by management who have managed them for the last 18 months under an owner operator mining model; and
• Addition of 0.5Moz of Proven & Probable Mineral Reserves and 0.7Moz Inferred Mineral Resources, representing an increase of 72 per cent. and 50 per cent. respectively to the Company's Mineral Resource and Reserve portfolio.

The Company has conditionally raised approximately £15.2 million (approximately US$20.0 million) from institutional investors through a placing of 797,449,000 Placing Shares at a price of 1.9 pence per Placing Share, representing approximately 15.0 per cent. of the Company's existing issued share capital. The Placing Price represents a discount of approximately 1.3 per cent. to the closing price of the Company's shares on 30 October 2017, being the latest practicable date before publication of this announcement. Under the terms of the Broker Option, the Company may also issue up to a further 99,681,021 new Common Shares at the Placing Price to sophisticated and accredited investors if exercised by the Agents.

Serhan Umurhan, Chief Executive Officer of Avesoro, commented:

"I am delighted to announce that we have entered into an agreement with Avesoro Jersey Ltd to acquire the Youga Gold Mine and Balogo Gold Mine in Burkina Faso. The Assets will provide Avesoro with geographic diversity within West Africa and are highly complementary to our existing New Liberty mine, significantly increasing Avesoro's gold production, in addition to adding high quality exploration upside that will provide for further future organic growth. In conjunction with the turnaround at New Liberty, this acquisition marks a significant next step in achieving our long-term plan to become a premier mid-tier African gold producer."

The Acquisition is subject to stock exchange and minority shareholder approvals, as described further in this announcement. Closing is anticipated on or around 18 December 2017, as soon as practicable after shareholder approval is obtained when the Placing will also complete.

In addition, the Company intends to propose, subject to shareholder approval, a share consolidation (or reverse stock split) of the issued and outstanding Common Shares (the "Share Consolidation") at a share consolidation ratio of one (1) post-consolidation Common Share for every hundred (100) pre-consolidation Common Shares. The actual timing for implementation, if any, of the Share Consolidation would be determined by the Board of Directors based upon its evaluation as to when such action would be most advantageous to the Company and its shareholders, and would be expected to occur in early 2018.

The Company will in due course send a circular to shareholders convening a Special Meeting to seek minority shareholder approval for the Acquisition and shareholder approval of the Share Consolidation to be completed in 2018. In conjunction with the Acquisition, an independent committee of directors was created in July 2017 consisting of Mr David Netherway, Mr Jean-Guy Martin and Mr Loudon Owen (the "Independent Committee") to supervise the negotiation of the Acquisition and the preparation of an independent formal valuation required by Canadian securities laws.

The Independent Committee considers, having consulted with the Company's Nominated Advisor, that the terms of the Acquisition are fair and reasonable insofar as its shareholders are concerned. 

The Independent Committee has unanimously recommended the approval of the Acquisition to the board of directors of the Company (the "Board"). Accordingly, and based on the recommendation of the Independent Committee, the Board intends to recommend that the Company's minority shareholders vote in favour of the resolution in respect of the Acquisition to be proposed at the Special Meeting.

This summary should be read in conjunction with the full text of the following Announcement and its Appendices. Capitalised terms used in this Announcement have the meanings given to them in Appendix B. Appendix A to this Announcement (which forms part of this Announcement) sets out the terms and conditions of the Placing. Persons who choose to participate in the Placing, by making an oral or written offer to acquire Placing Shares, will be deemed to have read and understood this Announcement in its entirety (including Appendix A) and to be making such offer on the terms and subject to the conditions herein, and to be providing the representations, warranties, agreements, acknowledgements and undertakings contained in Appendix A.

About Avesoro Resources Inc.

Avesoro Resources Inc. is a west Africa focussed gold mining, development and exploration company listed on the Toronto Stock Exchange ("TSX") and the AIM market operated by the London Stock Exchange ("AIM").

The Company's assets include the New Liberty Gold Mine in Liberia (the "New Liberty Gold Mine" or "New Liberty") which has an estimated Proven and Probable Mineral Reserve of 7.4 Mt with 717,000 ounces of gold grading 3.03 g/t and an estimated Measured and Indicated Mineral Resource of 9.6 Mt with 985,000 ounces of gold grading 3.2 g/t and an estimated Inferred Mineral Resource of 6.4 Mt with 620,000 ounces of gold grading 3.0 g/t.

The New Liberty Gold Mine is located within the Southern Block of the 100% owned Bea Mountain mining licence. This licence covers 478 km² and has a 25 year, renewable, mineral development agreement. The Bea Mountain mining license also hosts additional gold projects of Ndablama, Gondoja, Weaju and Leopard Rock which host Indicated and Inferred Mineral Resources. The Company also owns the adjacent Yambesei, Archaen West, Mabong and Mafa West licences, in addition to a gold exploration permit in Cameroon.

Qualified Persons

New Liberty

The information in this announcement relating to the Mineral Resource and Mineral Reserves Estimates for the New Liberty Gold mine has been prepared under the supervision of Dr Mike Armitage C Geol., C Eng., who is a Member of the Institute of Materials, Minerals and Mining and a Fellow of the Geological Society. Dr Armitage is a full-time employee of SRK Consulting (UK) Ltd and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he has undertaken to qualify as a "Qualified Person" as defined in National Instrument 43-101 "Standards of Disclosure for Mineral Projects" of the Canadian Securities Administrators.

Youga and Balogo

The information in this announcement relating to the Mineral Resource Estimates for the Youga Gold mine, Ouaré deposit and Balogo Gold Mine has been prepared by Malcolm Titley, who is a Member of the Australian Institute of Geologists. Mr Titley is a full-time employee of CSA Global (UK) Ltd and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he has undertaken to qualify as a "Qualified Person" as defined in National Instrument 43-101 "Standards of Disclosure for Mineral Projects" of the Canadian Securities Administrators. Mr Titley has reviewed and approved this announcement and consents to the inclusion in the announcement of the matters based on his information in the form and context in which this appears.

The information in this announcement relating to the Mineral Reserve Estimates for the Youga Gold Mine, Ouaré deposit and Balogo Gold Mine has been prepared by Dr Matthew Randall, who is a registered Fellow of the Institute of Materials, Minerals and Mining. Dr Randall is an associate consultant to CSA Global (UK) Ltd and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he has undertaken to qualify as a "Qualified Person" as defined in National Instrument 43-101 "Standards of Disclosure for Mineral Projects" of the Canadian Securities Administrators. Dr Randall has reviewed and approved this announcement and consents to the inclusion in the announcement of the matters based on his information in the form and context in which this appears.

An independent NI 43-101 technical report with respect to each of the Youga Gold Mine and Balogo Gold mine will be filed on SEDAR concurrently with the posting of the circular for the Special Meeting.

Company

The Company's Qualified Person is Mark J. Pryor, who holds a BSc (Hons) in Geology & Mineralogy from Aberdeen University, United Kingdom and is a Fellow of the Geological Society of London, a Fellow of the Society of Economic Geologists and a registered Professional Natural Scientist (Pr.Sci.Nat) of the South African Council for Natural Scientific Professions. Mark Pryor is an independent technical consultant with over 25 years of global experience in exploration, mining and mine development and is a "Qualified Person" as defined in National Instrument 43-101 "Standards of Disclosure for Mineral Projects" of the Canadian Securities Administrators and has reviewed and approved this announcement.

Indicative Timetable of Key Events

All references to times in this timetable are to London time.

Exchange Rate

Where applicable, the exchange rate of US$1.32: GBP1 has been used being the exchange rate as at 30 October 2017.

Forward Looking Statements

Certain information contained in this announcement constitutes forward looking information or forward looking statements with the meaning of applicable securities laws. This information or statements may relate to future events, facts, or circumstances or the Company's future financial or operating performance or other future events or circumstances. All information other than historical fact is forward looking information and involves known and unknown risks, uncertainties and other factors which may cause the actual results or performance to be materially different from any future results, performance, events or circumstances expressed or implied by such forward-looking statements or information. Such statements can be identified by the use of words such as "anticipate", "plan", "continue", "estimate", "expect", "may", "will", "would", "project", "should", "believe", "target", "predict" and "potential". No assurance can be given that this information will prove to be correct and such forward looking information included in this announcement should not be unduly relied upon. Forward looking information and statements speaks only as of the date of this announcement.

Forward looking statements or information in this announcement include, among other things, statements regarding the completion of the Acquisition and the Placing; the receipt of shareholder and regulatory approvals; forecast proforma 2017 gold production of 180-190koz; increase of forecast combined gold production for 2018 by approximately 60% to 230koz; the combined Youga & Balogo average Life of Mine production of 54koz per annum at average Cash Cost and All-in Sustaining Cost of US$870/oz and US$962/oz respectively; proforma year to date cash costs of US$660/oz; and that significant exploration upside will be added to Avesoro portfolio.

In making the forward looking information or statements contained in this announcement, assumptions have been made regarding, among other things: general business, economic and mining industry conditions; interest rates and foreign exchange rates; the continuing accuracy of Mineral Resource and Reserve estimates; geological and metallurgical conditions (including with respect to the size, grade and recoverability of Mineral Resources and Reserves) and cost estimates on which the Mineral Resource and Reserve estimates are based; the supply and demand for commodities and precious and base metals and the level and volatility of the prices of gold; market competition; the ability of the Company to raise sufficient funds from capital markets and/or debt to meet its future obligations and planned activities and that unforeseen events do not impact the ability of the Company to use existing funds to fund future plans and projects as currently contemplated; the stability and predictability of the political environments and legal and regulatory frameworks including with respect to, among other things, the ability of the Company to obtain, maintain, renew and/or extend required permits, licences, authorizations and/or approvals from the appropriate regulatory authorities; that contractual counterparties perform as agreed; and the ability of the Company to continue to obtain qualified staff and equipment in a timely and cost-efficient manner to meet its demand.

Actual results could differ materially from those anticipated in the forward looking information or statements contained in this announcement as a result of risks and uncertainties (both foreseen and unforeseen), and should not be read as guarantees of future performance or results, and will not necessarily be accurate indicators of whether or not such results will be achieved. These risks and uncertainties include the risks normally incidental to exploration and development of mineral projects and the conduct of mining operations (including exploration failure, cost overruns or increases, and operational difficulties resulting from plant or equipment failure, among others); the inability of the Company to obtain required financing when needed and/or on acceptable terms or at all; risks related to operating in West Africa, including potentially more limited infrastructure and/or less developed legal and regulatory regimes; health risks associated with the mining workforce in West Africa; risks related to the Company's title to its mineral properties; the risk of adverse changes in commodity prices; the risk that the Company's exploration for and development of mineral deposits may not be successful; the inability of the Company to obtain, maintain, renew and/or extend required licences, permits, authorizations and/or approvals from the appropriate regulatory authorities and other risks relating to the legal and regulatory frameworks in jurisdictions where the Company operates, including adverse or arbitrary changes in applicable laws or regulations or in their enforcement; competitive conditions in the mineral exploration and mining industry; risks related to obtaining insurance or adequate levels of insurance for the Company's operations; that Mineral Resource and Reserve estimates are only estimates and actual metal produced may be less than estimated in a Mineral Resource or Reserve estimate; the risk that the Company will be unable to delineate additional Mineral Resources; risks related to environmental regulations and cost of compliance, as well as costs associated with possible breaches of such regulations; uncertainties in the interpretation of results from drilling; risks related to the tax residency of the Company; the possibility that future exploration, development or mining results will not be consistent with expectations; the risk of delays in construction resulting from, among others, the failure to obtain materials in a timely manner or on a delayed schedule; inflation pressures which may increase the cost of production or of consumables beyond what is estimated in studies and forecasts; changes in exchange and interest rates; risks related to the activities of artisanal miners, whose activities could delay or hinder exploration or mining operations; the risk that third parties to contracts may not perform as contracted or may breach their agreements; the risk that plant, equipment or labour may not be available at a reasonable cost or at all, or cease to be available, or in the case of labour, may undertake strike or other labour actions; the inability to attract and retain key management and personnel; and the risk of political uncertainty, terrorism, civil strife, or war in the jurisdictions in which the Company operates, or in neighbouring jurisdictions which could impact on the Company's exploration, development and operating activities.

This announcement also contains Mineral Resource and Mineral Reserve estimates. Information relating to Mineral Resource and Mineral Reserve contained in this announcement is considered forward looking information in nature, as such estimates are estimates only, and that involve the implied assessment of the amount of minerals that may be economically extracted in a given area based on certain judgments and assumptions made by qualified persons, including the future economic viability of the deposit based on, among other things, future estimates of commodity prices. Such estimates are expressions of judgment and opinion based on the knowledge, mining experience, analysis of drilling results and industry practices of the qualified persons making the estimate. Valid estimates made at a given time may significantly change when new information becomes available, and may have to change as a result of numerous factors, including changes in the prevailing price of gold. By their nature, Mineral Resource and Mineral Reserve estimates are imprecise and depend, to a certain extent, upon statistical inferences which may ultimately prove unreliable. If such Mineral Resource and Mineral Reserve estimates are inaccurate or are reduced in the future (including through changes in grade or tonnage), this could have a material adverse impact on the Company and its operating and financial performance. Mineral resources that are not mineral reserves do not have demonstrated economic viability. Due to the uncertainty that may be attached to inferred mineral resources, it cannot be assumed that all or any part of an inferred mineral resource will be upgraded to an indicated or measured mineral resource as a result of continued exploration.

Although the forward-looking statements contained in this announcement are based upon what management believes are reasonable assumptions, the Company cannot provide assurance that actual results or performance will be consistent with these forward-looking statements. The forward looking information and statements included in this announcement are expressly qualified by this cautionary statement and are made only as of the date of this announcement. The Company does not undertake any obligation to publicly update or revise any forward looking information except as required by applicable securities laws.

Proposed Acquisition of the Youga Gold Mine and Balogo Gold Mine from Avesoro Jersey Limited

and

Placing of New Common Shares to raise approximately £15.2 million (approximately US$20.0 million) and Broker Option

1. Introduction

The Company announces that it has entered into an agreement to acquire the Acquired Entities which collectively hold the Youga Gold Mine and the Balogo Gold Mine in Burkina Faso from Avesoro Jersey Limited, the majority shareholder of Avesoro Resources Inc. Avesoro Jersey is a private gold mining and development group which is a subsidiary of Avesoro Holdings. Under the terms of the Acquisition, Avesoro Jersey will receive approximately £52.7 million (approximately US$69.5 million) as consideration of which approximately £38.6 million (approximately US$51.0 million) will be satisfied by the issuance of Consideration Shares to Avesoro Jersey at the Placing Price with the remaining approximately £14.0 million (approximately US$18.5 million) paid in cash from the proceeds of the Placing as described below. Approximately US$1.5 million of the funds raised pursuant to the Placing will be used for working capital purposes and transaction expenses. The number of Consideration Shares to be issued to Avesoro Jersey will be 2,033,492,822, issued at the Placing Price of 1.9 pence per share.

In conjunction with the Acquisition, the Company announces a conditional placing with institutional sophisticated and accredited investors of 797,449,000 Placing Shares at a Placing Price of 1.9 pence per Placing Share. The Placing Shares represent approximately 15.0% of the Company's existing issued share capital. Under the terms of the Broker Option, the Company may also issue up to a further 99,681,021 new Common Shares at the Placing Price on a private placement basis to sophisticated and accredited investors if exercised by the Agents.

Following the Acquisition and Placing, Avesoro Jersey's shareholding in the Company will remain at approximately 73 per cent. In the event the Broker Option is exercised in full by the Agents, Avesoro Jersey's shareholding in the Company will reduce to approximately 72 per cent.

The Acquisition is subject to shareholder approval, as described further in this announcement. Closing is anticipated on or around 18 December 2017.

2. Reasons for the Acquisition

Background

The Board has previously announced its intention to expand the Company's business through value accretive acquisitions of cash generative assets with exploration potential to create a premier mid-tier African gold producer.

The Board believe that the Acquisition is in line with this strategy and represents a compelling opportunity to double its production capacity with mature assets from within the wider Avesoro Group structure.

The Board believes that the Assets are attractive for the following reasons:

Youga and Ouaré

• Proven, mature asset which is forecast to produce approximately 60koz gold in 2017;
• Capable and established standalone management team;
• NI 43-101 compliant Proven and Probable Mineral Reserve of 9 million tonnes containing 434.4koz of gold grading 1.49g/t;
• NI 43-101 compliant Indicated Mineral Resource of 15.6 million tonnes containing 703koz of gold grading 1.40g/t and an Inferred Mineral Resource of 12.9 million tonnes containing 640koz grading 1.57g/t;
• Benefits from low-cost grid power delivered from Ghana;
• Additional satellite pits identified for further resources exploration; and
• Currently processes trucked ore from the Balogo deposit.

Avesoro Jersey purchased the Youga Gold Mine and Ouaré permit for US$25.3 million in February 2016 from Endeavour Mining and as at 30 June 2017 had invested an additional US$25 million principally in new mining equipment and drilling campaigns.

Balogo

• Logistically linked to the Youga processing plant via a 154km road rehabilitated by Avesoro Jersey in 2016;
• NI 43-101 compliant Probable Mineral Reserve of 0.28 million tonnes containing 78.37koz of gold grading 8.81g/t;
• NI 43-101 compliant Indicated Mineral Resource of 0.45 million tonnes containing 98.6koz of gold grading 6.75g/t and an Inferred Mineral Resource of 0.1 million tonnes containing 15koz grading 4.0g/t;
• Current operations are free dig and high grade. Average year to date mined grade of 7.2g/t gold;
• Proven mature asset forecast to produce 50.6koz gold in 2017; and
• Orebody well defined with future underground potential (current Life of Mine ends in 2018 based on current Mineral Reserve).

Avesoro Jersey purchased the Balogo permit for approximately US$8 million in April 2015 from Golden Rim Resources Ltd. and as at 30 June had invested an additional US$13 million in drilling programmes to delineate Mineral Reserves and Resources, feasibility studies and heavy mining equipment.

Strategic benefits for the Group

The Board believes that the Acquisition provides, inter alia, the following benefits:

• Diversification of group risk: The acquisition of the Assets in Burkina Faso provides diversification of project and geographic risk to the Company's shareholders.
• Growth opportunities: The Assets being acquired provide significant potential for exploration and further growth to resources and it is the Company's intention to seek opportunities to extend the Assets current scheduled mine life outside of the current mine plan.
• More than doubling forecast proforma gold production for 2017 and significant lowering of the group's average cash cost: The Assets are forecast to add a combined c.110koz of gold to the Company's proforma production profile in 2017.
• Increasing forecast gold production for 2018 by c. 60%: The Assets are forecast to add a combined c.86koz of gold to the Company's production profile in 2018.
• Positioning of the Company for further growth: The Acquisition is the next step in positioning the Company for further growth through acquisitions, and the Board believes this increases its attractiveness to equity investors. In combination with deleveraging of the balance sheet, the Board believes this will improve the Company's prospects to source further funding for accretive growth.

3. Background to the Assets

The Youga, Ouaré and Balogo Properties are situated in the "Centre-Sud" region of Burkina Faso, West Africa. Youga and Ouaré are located approximately 180km southeast of Ouagadougou, adjacent to the Ghanaian border. The licence properties are separated by the Nakambé River. The Balogo property is located approximately 160km west of the Youga property and approximately 100km south of Ouagadougou.

The scientific and technical information with respect to the Youga Gold Mine contained in this announcement is derived from the current technical report dated 19 June 2017 prepared by CSA Global (UK) Ltd ("CSA Global") entitled "Mineral Resource and Mineral Reserve Update for the Youga and Ouaré Projects" (the "Youga and Ouaré Technical Report"). The scientific and technical information with respect to the Balogo Gold Mine contained in this announcement is derived from the current technical report dated 16 June 2017 prepared by CSA Global entitled "Mineral Resource and Mineral Reserve Update for the Balogo Project" (the "Balogo Technical Report").

In April 2015, MNG Gold Burkina SARL (a subsidiary of Avesoro Jersey) executed an agreement with Golden Rim Resources Ltd. to acquire its entire interest in the Balogo Gold Mine. Since acquisition Avesoro Jersey has invested approximately US$13 million as at 30 June 2017 in additional drilling programs to delineate Mineral Reserves and Resources, feasibility studies and heavy mining equipment. Surrounding the Balogo Gold Mine there are a significant number of near-mine prospects that are currently the subject of exploration evaluation.

In February 2016, Avesoro Jersey acquired the Youga Gold Mine from Endeavour Mining Corporation. The Youga Gold Mine comprises an operating conventional open pit gold mine and three stage crushing, a single stage ball milling and Carbon in Leach ("CIL") processing plant with a processing throughput of approximately 1 million tonnes of ore per year at Youga and the nearby Ouaré deposit, located approximately 45km east of the Youga plant. The Youga mine has been in operation since 2008 and has produced approximately 600,000 ounces of gold prior to being acquired by Avesoro Jersey.

The most recent Mineral Reserve and Mineral Resource estimations for the Assets, as completed by CSA Global are detailed below.

Table 1: Measured & Indicated Mineral Resource Estimate at 28th February 2017

 

Table 2: Probable Mineral Reserves Estimate at 28th February 2017

 

Based on the above Mineral Reserves Estimate, the Assets are forecast to have a total gold recovery of 464.5koz based on a current mine life of eight years and average annual gold production of 54koz, with average Life of Mine operating costs of US$870/oz, all in sustaining costs of US$962/oz and a post-tax NPV of US$134 million at an 8% discount rate and US$1,300/oz gold price.

The loss before tax of the audited carve out results of the Youga Businesses for the year ended 31 December 2016 was US$3,494,000. The profit before tax of the unaudited combined results of the Youga Businesses for the 6 months ended 30 June 2017 was US$13,028,000.

The loss before tax of the audited combined results of the Balogo Businesses for the year ended 31 December 2016 was US$1,834,000. The profit before tax of the unaudited combined results of the Balogo Businesses for the 6 months ended 30 June 2017 was US$9,214,000.

4. Related Party Transaction

Avesoro Jersey, which currently holds 73.5 per cent. of the Company's issued common shares is the vendor of the Assets in the Acquisition. Given the current shareholding of Avesoro Jersey, the Acquisition will constitute a related party transaction under the AIM Rules. The independent directors of the Company, who formed an independent committee in July 2017 to review the Acquisition, and consisting of Mr David Netherway, Mr Jean-Guy Martin and Mr Loudon Owen consider, having consulted with the Company's Nominated Adviser, that the terms of this transaction are fair and reasonable insofar as its shareholders are concerned.

The Acquisition will also constitute a related party transaction under the TSX Rules and applicable Canadian securities laws, including Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions ("MI 61-101"). Accordingly, the Independent Committee of the Board of Directors of the Company retained Duff & Phelps who have prepared an independent formal valuation of the Assets as required by MI 61-101. The full text of the valuation will be included in the circular for the special shareholder meeting. See below under "Formal Valuation."

The Company will also be seeking minority shareholder approval of the Acquisition pursuant to section 5.6 of MI 61-101, as further described below. In determining minority approval for the Acquisition, the Company is required to exclude the votes attached to Common Shares that, to the knowledge of the Company or any "interested party" or their respective directors and senior officers, after reasonable inquiry, are beneficially owned or over which control or direction is exercised by "interested parties" and their "related parties" and "joint actors" (all as defined in MI 61-101). Accordingly, at the Special Meeting, the Common Shares held by (i) Avesoro Jersey, and (ii) any of its related parties, associates or affiliates, and joint actors will be excluded for the purposes of determining minority approval of the Acquisition. This is expected to be 3,922,952,429 Common Shares.

Neither the Company nor any of its officers or directors, after reasonable inquiry, are aware of any prior valuations or bona fide offers that have been completed or received by Avesoro Jersey in the past 24 months in respect of the Assets or are otherwise relevant to the Acquisition, other than the Duff & Phelps valuation.

The Acquisition is also subject to the receipt of TSX approval. However, the Company qualifies as an "eligible inter-listed issuer" as defined under the TSX Company Manual and, accordingly, is permitted to avail itself of the exemption under Section 602.1 of the TSX Company Manual which exempts an "eligible interlisted issuer" listed on a recognized exchange, such as AIM, from the application of the requirements contained in Section 501 of the TSX Company Manual in respect of a transaction involving insiders or other related parties.

5. Formal Valuation

The Independent Committee retained Duff & Phelps to provide an independent formal valuation in compliance with MI 61-101. Duff & Phelps is a global valuation and corporate finance advisor with expertise in complex valuation, transaction opinions, M&A, disputes and investigations, restructuring, and compliance and regulatory consulting.

Duff & Phelps delivered their written valuation report, dated 11 October 2017, containing the Valuation that concluded that the fair market value of the Acquired Entities (which hold the Assets) was in the range of US$71 million to US$83 million as of 30 September 2017, and a Fairness Opinion that concluded that the consideration to be paid for the Assets by the Company pursuant to the Acquisition is fair from a financial point of view to the Company. The Independent Committee carefully reviewed the Valuation and Fairness Opinion as well as other relevant materials and has unanimously recommended the approval of the Acquisition to the Board.

6. Information on Avesoro Jersey

Avesoro Jersey, is a privately-owned Jersey incorporated gold mining and development company focused on West Africa. Avesoro Jersey owns the Youga Gold Mine and Balogo Gold Mine in Burkina Faso, the Kokoya Gold Mine in Liberia and various exploration assets. The majority shareholder in Avesoro Jersey is Mr Murathan Günal, the eldest son of Mr Mehmet Nazif Günal, a Turkish entrepreneur, who is the owner and founder of the wider MNG Group. The MNG Group is a Turkish conglomerate that operates through multiple divisions across construction, energy, tourism, transport, finance and media.

Avesoro Jersey is the approximately 73.5 per cent. majority shareholder in the Company and has provided the Company with approximately US$90 million of equity funding to date.

Following the completion of the Acquisition and Placing, Avesoro Jersey will hold 5,945,715,251 Common Shares, representing approximately 73 per cent. of the then issued and outstanding Common Shares of the Company on a non-diluted basis. If the 99,681,021 Common Shares available under the Broker Option are issued, Avesoro Jersey will hold 5,945,715,251 Common Shares, representing approximately 72 per cent. of the then issued and outstanding Common Shares of the Company on a non-diluted basis.

7. Principal Terms of the Acquisition

Pursuant to the Acquisition Agreement, the Company (or one of its subsidiaries to be nominated by the Company) has conditionally agreed to acquire the entire issued and outstanding shares of the Acquired Entities (which collectively hold the Assets) from Avesoro Jersey. The Acquisition values the Assets at £52,651,515 (being the sterling equivalent of US$69,500,000 converted at the Exchange Rate). The Company will satisfy the consideration payable for the Acquisition at Closing by the issue of 2,033,492,822 Consideration Shares to Avesoro Jersey (representing £38,636,364 at the Placing Price) and payment of £14,015,152 in cash (from funds raised in the Placing).

The Acquisition is subject to the satisfaction or waiver of a number of conditions, including the passing by the minority shareholders of the Acquisition Resolution at the Special Meeting and the admission by the LSE of the Consideration Shares to AIM becoming effective in accordance with the AIM Rules.

Avesoro Jersey has made certain customary and transaction specific covenants in the Acquisition Agreement. These include, among other things, covenants to preserve and protect the businesses and assets of the Youga Gold Mine and the Balogo Gold Mine including maintaining adequate operating levels of stock and inventory.

Avesoro Jersey has given certain warranties and indemnities in respect of the Acquired Entities, subject to customary limitations in the case of the warranties.

8. Principal Terms of the Placing

Placing

The Company has conditionally placed 797,449,000 shares with institutional investors at the Placing Price of 1.9 pence per Placing Share to raise approximately £15.2 million (approximately US$20.0 million) before expenses.

Broker Option

The Company has granted the Agents the option to place up to an additional 99,681,021 Common Shares at the Placing Price, in the event that further requests to participate in the Placing are received after the date of this Announcement and before the Broker Option closes at 5.00pm London Time on 31 October 2017. Funds received from the Broker Option will be used for working capital purposes.

Private Placement in Canada

The Placing has been made available in Canada by way of a private placement to accredited investors in the provinces of Canada.  All securities issued under the Placing in Canada or to residents of Canada will be subject to a four month hold period from the date of issue in accordance with applicable securities laws in Canada, and potentially additional restrictions under the laws of other jurisdictions in which the Placing may be made. Sprott Capital Partners, a division of Sprott Private Wealth LP ("Sprott") is acting as agent for the Placing in Canada. Persons in Canada who are not accredited investors are not eligible to participate in the Placing or the Broker Option.

9. Agency Agreement

The Company, Numis Securities Limited ("Numis"), Hannam & Partners (Advisory) LLP ("H&P") (Numis and H&P together being the "Joint Bookrunners" and each a "Joint Bookrunner") and Sprott (the Joint Bookrunners and Sprott, together being the "Agents" and each an "Agent" herein have entered into an agency agreement (the "Agency Agreement") pursuant to which the Agents have agreed, in accordance with the terms of the Agency Agreement, to use their respective reasonable endeavours to procure subscribers on behalf of the Company for 791,449,000 Placing Shares at the Placing Price.

The Agency Agreement contains customary warranties given by the Company to the Agents as to matters relating to the Company and its business and a customary indemnity given by the Company to the Agents in respect of liabilities arising out of or in connection with the Placing. The Joint Bookrunners are entitled to terminate the Agency Agreement in certain circumstances prior to Admission, including circumstances where any of the warranties are found not to be true or accurate or were misleading and upon the occurrence of certain other events.

The Placing is conditional, inter alia, on:

The Company has also granted the Broker Option to the Agents under the Agency Agreement in order to enable the Agents to place up to an additional 99,681,021 Common Shares at the Placing Price, in the event that further requests to participate in the Placing are received.

The Broker Option is exercisable at the discretion of the Joint Bookrunners on one or more occasions at any time prior to 5.00 p.m. London time on 31 October 2017. Any Shares issued pursuant to the exercise of the Broker Option will be issued at the Placing Price and on the terms and conditions set out in the Appendix to this announcement. The Broker Option may be exercised by the Joint Bookrunners at their discretion, with the agreement of the Company, but there is no obligation on the Joint Bookrunners to exercise the Broker Option or to seek to procure subscribers for Common Shares pursuant to the Broker Option. The net proceeds received by the Company pursuant to the exercise of the Broker Option (if any), being a maximum of approximately US$2.5 million gross of fees, will be used for general corporate purposes.

The maximum number of new Common Shares that may be issued pursuant to the exercise of the Broker Option is 99,681,021, and therefore the maximum number of Common Shares (including Common Shares issued pursuant to exercise of the Broker Option) that may be issued pursuant to the Placing and the Broker Option is 897,130,021.

The Common Shares issued pursuant to the Placing will represent, in aggregate, approximately 9.8 per cent. of the enlarged issued share capital of the Company following the Placing. The Common Shares issued pursuant to the Placing together with Common Shares issued upon exercise of the Broker Option (assuming that the Broker Option is exercised in full) would represent, in aggregate, approximately 10.9 per cent. of the enlarged issued share capital of the Company following the Placing and the exercise in full of the Broker Option. The Common Shares issued pursuant to the Placing and all Common Shares issued upon exercise of the Broker Option will be issued fully paid and will, upon issue, rank pari passu in all respects with the Common Shares then in issue, including all rights to receive all dividends and other distributions declared, made or paid following Admission of such Common Shares. Neither the Common Shares issued pursuant to the Placing nor the Common Shares that may be issued under the Broker Option are being made available to the public or being offered or sold in any jurisdiction where it would be unlawful to do so. The Placing is not underwritten by the Agents.

Application will be made to the London Stock Exchange and the TSX for Admission of the Common Shares to be issued pursuant to the Placing and the Acquisition (and if relevant on exercise of the Broker Option), and it is expected that dealings will commence at 8.00 a.m. (London time) on 18 December 2017.

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014.

APPENDIX A

TERMS AND CONDITIONS OF THE PLACING

IMPORTANT INFORMATION FOR INVITED PLACEES ONLY REGARDING THE PLACING.

MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING OR SUBSCRIBE FOR SHARES PURSUANT TO THE BROKER OPTION. ALL OFFERS OF THE PLACING SHARES AND ANY BROKER OPTION SHARES WILL BE MADE PURSUANT TO AN EXEMPTION UNDER DIRECTIVE 2003/71/EC (AND AMENDMENTS THERETO), AND INCLUDING ANY RELEVANT IMPLEMENTING MEASURE, IN THE RELEVANT MEMBER STATE OF THE EUROPEAN ECONOMIC AREA ("EEA")) (THE "PROSPECTUS DIRECTIVE"), FROM THE REQUIREMENT TO PRODUCE A PROSPECTUS FOR OFFERS OF THE PLACING SHARES AND BROKER OPTION SHARES. THIS ANNOUNCEMENT AND THE TERMS AND CONDITIONS SET OUT IN THIS ANNOUNCEMENT ARE FOR INFORMATION PURPOSES ONLY AND ARE DIRECTED ONLY AT PERSONS WHO ARE: (A) PERSONS IN AN EEA MEMBER STATE WHICH HAS IMPLEMENTED THE PROSPECTUS DIRECTIVE (A "RELEVANT MEMBER STATE"), UNDER THE FOLLOWING EXEMPTIONS UNDER THE PROSPECTUS DIRECTIVE, IF AND TO THE EXTENT THEY HAVE BEEN IMPLEMENTED IN THAT RELEVANT MEMBER STATE: (I) TO ANY LEGAL ENTITY WHICH IS A "QUALIFIED INVESTOR" AS DEFINED IN THE PROSPECTUS DIRECTIVE; (II) TO FEWER THAN 150 NATURAL OR LEGAL PERSONS (OTHER THAN QUALIFIED INVESTORS AS DEFINED IN THE PROSPECTUS DIRECTIVE), AS PERMITTED UNDER THE PROSPECTUS DIRECTIVE; OR (III) IN ANY OTHER CIRCUMSTANCES WHICH DO NOT REQUIRE THE PUBLICATION BY THE COMPANY OF A PROSPECTUS PURSUANT TO ARTICLE 3 OF THE PROSPECTUS DIRECTIVE, PROVIDED THAT NO SUCH OFFER TO THE PUBLIC SHALL RESULT IN A REQUIREMENT FOR THE PUBLICATION BY ANY OF THE COMPANY, NUMIS SECURITIES LIMITED ("NUMIS"), HANNAM AND PARTNERS (ADVISORY) LLP ("H&P") (EACH OF NUMIS AND H&P BEING A "JOINT BOOKRUNNER" AND TOGETHER THE "JOINT BOOKRUNNERS") OR SPROTT CAPITAL PARTNERS, A DIVISION OF SPROTT PRIVATE WEALTH LP ("SPROTT") (THE JOINT BOOKRUNNERS AND SPROTT TOGETHER BEING THE "BROKERS") OF A PROSPECTUS PURSUANT TO ARTICLE 3 OF THE PROSPECTUS DIRECTIVE; AND (B) (I) INVESTMENT PROFESSIONALS FALLING WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005, (THE "ORDER"); OR (II) HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS AND OTHER PERSONS FALLING WITHIN ARTICLE 49(2)(A) TO (D) OF THE ORDER OR TO WHOM THEY MAY OTHERWISE LAWFULLY BE DISTRIBUTED (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS").

THIS ANNOUNCEMENT (INCLUDING THIS APPENDIX) AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, JAPAN, NEW ZEALAND, SOUTH AFRICA, JERSEY OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.  THIS ANNOUNCEMENT (WITHOUT THE APPENDIX) MAY BE RELEASED, PUBLISHED OR DISTRIBUTED BY THE COMPANY IN ACCORDANCE WITH ITS CONTINUOUS DISCLOSURE REQUIREMENTS UNDER APPLICABLE CANADIAN SECURITIES LAWS AND THE REQUIREMENTS OF THE TORONTO STOCK EXCHANGE ("TSX").

EACH PLACEE SHOULD CONSULT WITH ITS OWN ADVISERS AS TO THE LEGAL, TAX, BUSINESS AND RELATED ASPECTS OF A PURCHASE OF PLACING SHARES AND/OR BROKER OPTION SHARES.

THE PLACING SHARES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER THE SECURITIES LAWS OF, OR WITH ANY SECURITIES REGULATORY AUTHORITY OF, ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES, AND MAY NOT BE OFFERED, SOLD OR TRANSFERRED, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM THE UNITED STATES ABSENT REGISTRATION UNDER THE SECURITIES ACT OR PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN COMPLIANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES. ANY OFFERING OF THE PLACING SHARES TO BE MADE IN THE UNITED STATES WILL BE MADE ONLY TO A LIMITED NUMBER OF "QUALIFIED INSTITUTIONAL BUYERS" ("QIBS") WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT ("RULE 144A") PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT IN A TRANSACTION NOT INVOLVING A "PUBLIC OFFERING" AND OUTSIDE THE UNITED STATES PERSONS IN OFFSHORE TRANSACTIONS WITHIN THE MEANING OF, AND IN RELIANCE ON, REGULATION S UNDER THE SECURITIES ACT. NO PUBLIC OFFERING OF THE SHARES REFERRED

This Announcement is for information purposes only and does not constitute an offer to sell or issue or the solicitation of an offer to buy, subscribe for or otherwise acquire any Placing Shares or Broker Option Shares in any jurisdiction in which any such offer or solicitation would be unlawful.

All offers of the Placing Shares and any Broker Option Shares will be made pursuant to an exemption under the Prospectus Directive from the requirement to produce a prospectus. This Announcement is being distributed and communicated to persons in the UK only in circumstances to which section 21(1) of the Financial Services and Markets Act 2000 (as amended) "FSMA") does not apply. 

The securities referred to in this Announcement have not been approved or disapproved by the US Securities and Exchange Commission, any State securities commission or any other regulatory authority in the United States, nor have any of the foregoing authorities passed upon or endorsed the merits of the Placing or the accuracy or adequacy of this Announcement. Any representation to the contrary is a criminal offence in the United States.

The distribution of this Announcement and the Placing and/or issue of the Placing Shares and any Broker Option Shares in certain jurisdictions may be restricted by law. No action has been taken by the Company, the Brokers or any of their respective affiliates that would permit an offer of the Placing Shares or Broker Option Shares or possession or distribution of this Announcement or any other offering or publicity material relating to such Placing Shares or Broker Option Shares in any jurisdiction where action for that purpose is required. Persons into whose possession this Announcement comes are required by the Company and the Brokers to inform themselves about and to observe any such restrictions.

This Announcement should be read in its entirety. In particular, you should read and understand the information provided in the "Important Notices" section of this Announcement.

Persons who are invited to and who choose to participate in the Placing will be deemed to have read and understood this Announcement in its entirety, to be participating, making an offer and acquiring Placing Shares (or Broker Option Shares, as the case may be) on the terms and conditions contained in this Appendix and to be providing the representations, warranties, indemnities, acknowledgements and undertakings contained in this Appendix. In particular, each such Placee represents, warrants, undertakes, agrees and acknowledges (amongst other things), that:

1        it is a Relevant Person and undertakes that it will acquire, hold, manage or dispose of any Placing Shares and Broker Option Shares that are allocated to it for the purposes of its business; and

2        in the case of a Relevant Person in a Relevant Member State who acquires any Placing Shares or Broker Option Shares pursuant to the Placing:

(a)      it is a Qualified Investor; and

(b)      in the case of any Placing Shares or Broker Option Shares acquired by it as a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive,

(i)       the Placing Shares acquired by it in the Placing have not been acquired on behalf of, nor have they been acquired with a view to their offer or resale to, persons in any Relevant Member State other than Qualified Investors or in circumstances in which the prior consent of the Joint Bookrunners has been given to the offer or resale; or

(ii)      where Placing Shares have been acquired by it on behalf of persons in any member state of the EEA other than Qualified Investors, the offer of those Placing Shares to it is not treated under the Prospectus Directive as having been made to such persons; and

3        it is acquiring the Placing Shares for its own account or is acquiring the Placing Shares for an account with respect to which it exercises sole investment discretion and has the authority to make and does make the representations, warranties, indemnities, acknowledgements and agreements contained in this Announcement; and

4        it understands (or, if acting for the account of another person, such person understands) the resale and transfer restrictions set out in this Appendix; and

5        except for a limited number of QIBs who have executed and delivered to the Company and the Brokers a US investor letter substantially in the form provided to it, (i) it and the person(s), if any, for whose account or benefit it is acquiring the Placing Shares are acquiring the Placing Shares in an offshore transaction as defined in and in accordance with Regulation S under the Securities Act ("Regulation S").

No offering / no prospectus

This Announcement does not constitute an offer, and may not be used in connection with an offer, to sell or issue or the solicitation of an offer to buy or subscribe for Placing Shares or Broker Option Shares in any jurisdiction in which such offer or solicitation is or may be unlawful.

No prospectus or other offering document has been or will be submitted to be approved by the Financial Conduct Authority in relation to the Placing and Placees' commitments will be made solely on the basis of the information contained in this Announcement and any information publicly announced through a Regulatory Information Service (as defined in the AIM Rules for Companies (the "AIM Rules")) or made available on the System for Electronic Document Analysis and Retrieval (SEDAR) by or on behalf of the Company on or prior to the date of this Announcement (including, without limitation, the information which the Company is required to public in accordance with the AIM Rules for Companies as well as the rules and policies of the TSX, which includes a description of the Company's business and certain of the Company's financial information, including certain balance sheets and income statements) (the "Publicly Available Information") and subject to any further terms set forth in the contract note or trade confirmation sent to individual placees. Each Placee, by participating in the Placing, agrees that it has neither received nor relied on any information, representation, warranty or statement made by or on behalf of the Brokers or the Company other than the Publicly Available Information and none of the Brokers, the Company nor any person acting on such person's behalf nor any of their affiliates has or shall have any liability for any Placee's decision to participate in the Placing based on any other information, representation, warranty or statement. Each Placee acknowledges and agrees that it has relied on its own investigation of the business, financial or other position of the Company in accepting a participation in the Placing. Nothing in this paragraph shall exclude the liability of any person for fraudulent misrepresentation.

Details of the Agency Agreement, the Placing Shares and the Broker Option Shares

The Brokers have entered into the Agency Agreement with the Company under which the Brokers have undertaken, on the terms and subject to the conditions set out in the Agency Agreement, to use their respective reasonable endeavours to procure Placees for the Placing Shares at a price of 1.9 pence per Placing Share (the "Placing Price") to raise gross proceeds of approximately US$20.0 million. The Joint Bookrunners have been granted an option to increase the size of the Placing and to procure Placees for such additional number of Common Shares as will raise gross proceeds of the Placing by up to US$2.5 million (the "Broker Option"). The Joint Bookrunners give no assurance of the exercise (in whole or in part) of the Broker Option.

The Broker Option is exercisable on more than one occasion at any time prior to 5.00 p.m. London Time on 31 October 2017. Any Broker Option Shares issued pursuant to the exercise of the Broker Option will be issued on the same terms and conditions as the Placing Shares issued pursuant to the Placing. The Broker Option may be exercised by the Joint Bookrunners and there is no obligation on either Joint Bookrunner to exercise the Broker Option or to seek to procure subscribers for Broker Option Shares or subscribe for any Broker Option Shares themselves. Accordingly, any allocation of Broker Option Shares is conditional upon such exercise and is therefore not a firm allocation. The maximum number of Broker Option Shares that may be issued pursuant to the exercise of the Broker Option is 99,681,021.

The Placing is not being underwritten by any of the Brokers or any of their respective affiliates.

The Placing Shares and any Broker Option Shares will, when issued, be fully paid and will rank pari passu in all respects with the existing common shares in the capital of the Company, including the right to receive all dividends and other distributions declared, made or paid in respect of such common shares after the date of issue of the Placing Shares or any Broker Option Shares (as the case may be).

As part of the Placing, the Company has agreed that it will not issue or sell any common shares for a period of 90 days after Admission without prior consent from the Joint Bookrunners. This agreement is subject to certain customary exceptions and does not prevent the Company from granting options, and allotting and issuing common shares pursuant to options granted to employees in the normal course of business.

Special Meeting and Applications for admission to listing and trading on AIM and the Toronto Stock Exchange ("TSX")

The Special Meeting of the Company's shareholders will be held on or about 14 December 2017 to consider resolutions relating to the Acquisition (the "Resolutions").

Application will be made to the London Stock Exchange for admission to trading of the Placing Shares and any Broker Option Shares on AIM ("Admission"), following passing of the Resolutions by the requisite majority of the Company's shareholders.

It is expected that Admission will take place on or before 8.00 a.m. (London time) on 18 December 2017 and that dealings in the Placing Shares and any Broker Option Shares on AIM will commence at the same time.

The Company will apply for conditional approval of the TSX with respect to the listing of the Placing Shares and any Broker Option Shares, subject only to the satisfaction by the Company of customary post-closing conditions imposed by the TSX in similar circumstances.

Principal terms of the Placing

This Appendix gives details of the terms and conditions of, and the mechanics of participation in, the Placing. No commissions will be paid to Placees or by Placees in respect of any Placing Shares or any Broker Option Shares.

1        The Joint Bookrunners are acting as joint bookrunners and agents of the Company and Sprott is acting as a co-lead manager and agent of the Company in connection with the Placing.

2        Participation in the Placing is only available to persons who may lawfully be, and are, invited by a Broker to participate. The Brokers and their respective affiliates are entitled to participate as principal in the Placing.

3        The price per Placing Share (and if relevant per Broker Option Share) (the "Placing Price") is 1.9 pence and is payable to the Relevant Broker.

4        Each Placee's allocation is determined by the Broker in their discretion following consultation with the Company and has been or will be confirmed orally by the Relevant Broker and a trade confirmation will be dispatched as soon as possible thereafter. The oral confirmation from the relevant Broker to the relevant Placee will constitute an irrevocable legally binding commitment upon such person (who will at that point become a Placee) in favour of the Relevant Broker and the Company to acquire the number of Placing Shares (or if relevant Broker Option Shares) allocated to it and to pay the relevant Placing Price on the terms and conditions set out in this Appendix and in accordance with the Company's articles of association. Except with the express consent of the Relevant Broker, such commitment will not be capable of variation or revocation at the time at which it is submitted. Placees in Canada will also be required to execute subscription agreements (the "Subscription Agreements") and to return those executed Subscription Agreements to the Relevant Broker by no later than 30 October 2017, failing which their allocation may be cancelled.

5        An offer to acquire Placing Shares and (if relevant) Broker Option Shares, which has been communicated by a prospective Placee to the Relevant Broker which has not been withdrawn or revoked prior to publication of this Announcement shall not be capable of withdrawal or revocation immediately following the publication of this Announcement without the consent of the Brokers.

6        Each Placee will have an immediate, separate, irrevocable and binding obligation, owed to the Relevant Broker, to pay to such Relevant Broker (or as it may direct) in cleared funds an amount equal to the product of the Placing Price and the number of Placing Shares and (if relevant) Broker Option Shares such Placee has agreed to acquire and the Company has agreed to issue to that Placee.

7        Each Placee's allocation and commitment will be evidenced by a contract note or trade confirmation issued to such Placee by the Relevant Broker. The terms of this Appendix will be deemed incorporated therein.

8        Except as required by law or regulation, no press release or other announcement will be made by the Brokers or the Company using the name of any Placee (or its agent), in its capacity as Placee (or agent), other than with such Placee's prior written consent.

9        Irrespective of the time at which a Placee's allocation(s) pursuant to the Placing is/are confirmed, settlement for all Placing Shares and (if relevant) Broker Option Shares to be acquired pursuant to the Placing will be required to be made at the same time, on the basis explained below under 'Registration and Settlement'.

10      All obligations under the Placing will be subject to fulfilment of the conditions referred to below under 'Conditions of the Placing' and to the Placing not being terminated on the basis referred to below under 'Termination of the Placing'.

11      Each Placee's rights and obligations in respect of the Placing will terminate only in the circumstances described below and will not be capable of rescission or termination by the Placee.

12      To the fullest extent permissible by law, none of the Brokers nor any of their respective affiliates nor any of their respective or affiliates' agents, directors, officers or employees shall have any liability to Placees (or to any other person whether acting on behalf of a Placee or otherwise). In particular, none of the Brokers nor any of their respective affiliates nor any of their agents, directors, officers or employees shall have any liability (including, to the extent permissible by law, any fiduciary duties) in respect of the Brokers' conduct of the Placing.

Registration and Settlement

Placees will be sent a contract note or trade confirmation which will confirm the number of Placing Shares and any Broker Option Shares allocated to them and the aggregate amount owed by them to the Relevant Broker. Each Placee will be deemed to agree that it will do all things necessary to ensure that delivery and payment is completed in accordance with either the standing CREST or certificated settlement instructions which they have in place with the Relevant Broker or otherwise as such Relevant Broker may direct or, in the case of a Placee in Canada, in accordance with the terms and conditions set forth in that Placee's Subscription Agreement.

Other than Placees in Canada, settlement of transactions in the Placing Shares and any Broker Option Shares (ISIN: CA0515471070) following Admission will take place within the CREST system. Settlement through CREST will be on a T+2 basis unless otherwise notified by the Relevant Broker and is expected to occur on 18 December 2017. Settlement will be on a delivery versus payment basis. However, in the event of any difficulties or delays in the admission of the Placing Shares and any Broker Option Shares to CREST or the use of CREST in relation to the Placing, the Company and the Relevant Broker may agree that the Placing Shares and any Broker Option Shares should be issued in certificated form. The Brokers reserve the right to require settlement for the Placing Shares and any Broker Option Shares, and to deliver the Placing Shares and any Broker Option Shares to Placees, by such other means as it deems necessary if delivery or settlement to Placees is not practicable within the CREST system or would not be consistent with regulatory requirements in a Placee's jurisdiction.

Interest is chargeable daily on payments not received from Placees on the due date in accordance with the arrangements set out above, in respect of either CREST or certificated deliveries, at the rate of 2 percentage points above prevailing LIBOR as determined by the Joint Bookrunners.

Placing Shares and any Broker Option Shares purchased pursuant to the Placing by a Placee in Canada will be either delivered in definitive certificate form or delivered and deposited in the form of an electronic deposit pursuant to the non-certificate issue system maintained by CDS Clearing and Depositary Services Inc., in each case as specified in the delivery instructions in that Placee's Subscription Agreement and subject to receipt by the Company of the purchase price for those Placing Shares or the Broker Option Shares, as the case may be.

If Placees do not comply with their obligations the Relevant Broker may sell any or all of their Placing Shares and any Broker Option Shares on their behalf and retain from the proceeds, on behalf of the Company, an amount equal to the Placing Price of each share sold plus any interest due. Placees will, however, remain liable for any shortfall below the Placing Price and for any stamp duty or stamp duty reserve tax (together with any interest or penalties) which may arise upon the sale of their Placing Shares and any Broker Option Shares on their behalf.

If Placing Shares or Broker Option Shares are to be delivered to a custodian or settlement agent, Placees must ensure that, upon receipt, the conditional contract note or trade confirmation is copied and delivered immediately to the relevant person within that organisation. Insofar as Placing Shares or Broker Option Shares are registered in a Placee's name or that of its nominee or in the name of any person for whom a Placee is contracting as agent or that of a nominee for such person, such Placing Shares and/or Broker Option Shares should, subject as provided below, be so registered free from any liability to UK stamp duty or stamp duty reserve tax. Placees will not be entitled to receive any fee or commission in connection with the Placing.

Conditions of the Placing

The Placing is conditional upon the Agency Agreement becoming unconditional and not having been terminated in accordance with its terms.

The obligations of the Brokers under the Agency Agreement are, and the Placing is, conditional on, inter alia:

(a)      the Company having delivered to the Joint Bookrunners a certificate certifying, inter alia, that (i) the Company has complied with all the covenants and satisfied all the terms and conditions of the Agency Agreement and the Subscription Agreements required to be complied with or satisfied prior to the time of closing except to the extent that the same have been waived by the Joint Bookrunners, (ii) no transaction out of the ordinary course of business, material to the Company, taken as a whole, has been entered into by the Company or its material subsidiaries or has been approved by the management of any of them and (iii) the representations and warranties of the Company contained in the Agency Agreement and the Subscription Agreements, and in any certificates of the Company delivered pursuant to or in connection with the Agency Agreement and the Subscription Agreements, are true and correct as at the time such representations and warranties are made;

(b)      the Placing Shares and any Broker Option Shares having been conditionally approved for listing on the TSX, subject only to the Standard Listing Conditions;

(c)      the Acquisition Agreement and the Subscription Agreements having been executed and delivered by the Company in form and substance satisfactory to the Joint Bookrunners and their legal counsel, acting reasonably;

(d)        the Acquisition Agreement having been entered into on or before the date of this Announcement and remaining in full force and effect (without any amendments to its terms) and not having been terminated or lapsed, there having been no breach of its terms which in the opinion of the Joint Bookrunners (acting in good faith) is material in the context of the Placing or any circumstances that would give any party to the Acquisition Agreement the right to terminate the Acquisition Agreement;

(e)      all conditions required to complete the Acquisition having been satisfied or waived (and, if waived, such waiver(s) having been disclosed in writing to and approved by the Joint Bookrunners) (save for (i) any condition relating to the Agency Agreement becoming unconditional; (ii) any condition relating to Admission becoming unconditional; and (iii) the satisfaction of the Company's obligation to pay the consideration under the Acquisition Agreement);

(f)       the Company issuing and allotting the Placing Shares and (where relevant) the Broker Option Shares, subject only to Admission;

(g)      the Company having received all required shareholder and regulatory approvals (including approval of the TSX) in respect of the Acquisition and the Company obtaining minority approval as required under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions; and

(h)      Admission taking place not later than 8.00 a.m. (London time) on 31 January 2018,

(all conditions to the obligations of the Brokers included in the Agency Agreement being together, the "conditions"). The Joint Bookrunners and the Company may agree to extend the time and/or date by which any condition is required to be fulfilled to no later than 8.00 a.m. on 31 January 2018.

If any of the conditions set out in the Agency Agreement is not fulfilled or, where permitted, waived to the extent permitted by law or regulations in accordance with the Agency Agreement within the stated time periods (or such later time and/or date as the Company and the Joint Bookrunners may agree), or the Agency Agreement is terminated in accordance with its terms (as to which, see the "Termination of the Placing" section below), the Placing will lapse and the Placee's rights and obligations shall cease and terminate at such time and each Placee agrees that no claim can be made by or on behalf of the Placee (or any person on whose behalf the Placee is acting) in respect thereof.

By participating in the Placing, each Placee agrees that its rights and obligations cease and terminate only in the circumstances described above and under "Termination of the Placing" below and will not be capable of rescission or termination by it.

The Joint Bookrunners may, at their absolute discretion and upon such terms as they think appropriate, waive fulfilment of all or any of the conditions in the Agency Agreement in whole or in part (to the extent permitted by law or regulation) or extend the time provided for fulfilment of any such conditions in respect of all or any part of the performance thereof. Any such extension or waiver will not affect Placees' commitments as set out in this Appendix.

Neither of the Joint Bookrunners nor any of their affiliates nor any of their or their respective affiliates' agents, directors, officers or employees nor the Company shall have any liability to any Placee (or to any other person whether acting on behalf of a Placee or otherwise) in respect of any decision any of them may make as to whether or not to waive or to extend the time and/or date for the satisfaction of any condition to the Placing nor for any decision any of them may make as to the satisfaction of any condition or in respect of the Placing generally and by participating in the Placing each Placee agrees that any such decision is within the absolute discretion of the Joint Bookrunners and the Company.

Termination of the Placing

Each Joint Bookrunner may in its absolute discretion terminate the Agency Agreement at any time up to and including Admission in certain circumstances, including (among others) where:

(a)      the Company is in breach or default under or in non-compliance with any warranty, representation, term or condition of the Agency Agreement or the Subscription Agreements; or

(b)      any order to cease or suspend trading in any securities of the Company or prohibiting or restricting the distribution of any of the Placing Shares is made, or proceedings are announced, commenced or threatened for the making of any such order, by any securities commission or similar regulatory authority, any stock exchange or any other competent authority, and has not been rescinded, revoked or withdrawn; or

(c)      any inquiry, action, suit, investigation or other proceeding (whether formal or informal) in relation to the Company or its material subsidiaries is instituted or threatened or announced or any order is made by any governmental body having jurisdiction over the Company or its material subsidiaries (other than an inquiry, action, suit, investigation or proceeding or order based solely upon the activities or alleged activities of the Joint Bookrunners), which has not been rescinded, revoked or withdrawn and which, in the opinion of the Joint Bookrunners, acting reasonably, operates to prevent or materially restrict the distribution of the Placing Shares into any jurisdiction in which they have been lawfully offered or would prevent or materially restrict the distribution of the Placing Shares under the Agency Agreement and the Subscription Agreements or would prevent or materially restrict trading in the Placing Shares or would reasonably be expected to materially adversely affect the market price or value of the Placing Shares; or

(d)      there should occur any material change, change of a material fact, occurrence or event or any development that would reasonably be expected to result in a material change or change of a material fact (other than a change related solely to information provided by the Joint Bookrunners) which, in the opinion of the Joint Bookrunners, acting reasonably, has or would be expected to have a material adverse effect on or change to certain aspects of the business of the Company and its subsidiaries or material adverse effect on the market price or value of any of the Placing Shares; or

(e)      there should develop, occur or come into effect or existence any event, action, state, condition or major financial occurrence of national or international consequence or any law or regulation or any international crisis, act of terrorism or outbreak of hostilities which, in the opinion of the Joint Bookrunners, acting reasonably, seriously adversely affects or may seriously adversely affect the financial markets in Canada, the United States or the United Kingdom or the business, operations or affairs of the Company and its subsidiaries, taken as a whole, or the market price, value of any of the Placing Shares; or

(f)       the Company is required to publish a supplementary circular.

If the Agency Agreement is terminated in accordance with its terms, the rights and obligations of each Placee in respect of the Placing as described in this Announcement shall cease and terminate at such time and no claim may be made by any Placee in respect thereof. For the avoidance of doubt, notwithstanding that a termination right may arise under the Agency Agreement, the Joint Bookrunners reserve the right to proceed with the Placing.

By participating in the Placing, each Placee agrees with the Company and the Joint Bookrunners that the exercise by the Company or the Joint Bookrunners of any right of termination or any other right or other discretion under the Agency Agreement shall be within the absolute discretion of the Company or the Joint Bookrunners (as the case may be) and that neither the Company nor the Joint Bookrunners need make any reference to such Placee and that none of the Company, the Brokers, their respective affiliates or their or their respective affiliates' agents, directors, officers or employees, respectively, shall have any liability to such Placee (or to any other person whether acting on behalf of a Placee or otherwise) whatsoever in connection with any such exercise.

By participating in the Placing, each Placee agrees that its rights and obligations terminate only in the circumstances described above and under the "Conditions of the Placing" above and will not be capable of rescission or termination by it after oral confirmation by the relevant Broker of its allocation.

Representations, warranties and further terms

By participating in the Placing, each prospective Placee (and any person acting on such Placee's behalf) represents, warrants, acknowledges and agrees (for itself and for any such prospective Placee) that:

1        it has read and understood this Announcement in its entirety and that its acquisition of the Placing Shares (or as the case may be Broker Option Shares) is subject to and based upon all the terms, conditions, representations, warranties, indemnities, acknowledgements, agreements and undertakings and other information contained in this Appendix and that it has not relied on, and will not rely on, any information given or any representations, warranties or statements made at any time by any person in connection with Admission, the Placing, the Company, the Common Shares, or otherwise, other than the information contained in this Announcement and the Publicly Available Information;

2        it has not received a prospectus or other offering document in connection with the Placing and acknowledges that no prospectus or other offering document has been or will be prepared in connection with the Placing;

3        the Common Shares are admitted to trading on AIM, a market of the London Stock Exchange plc (the "LSE") and listed on the Toronto Stock Exchange (the "TSX"), and that it is able to obtain or access the Publicly Available Information and has had access to all other information regarding the Company and its present and prospective business, assets, liabilities and financial condition that it reasonably considers important in making the decision to acquire the Placing Shares and it has read and understood such information;

4        none of the Brokers nor the Company nor any of their respective affiliates, or their or their respective affiliates' agents, directors, officers or employees, respectively, nor any person acting on behalf of any of them has provided, and will not provide, it with any material regarding the Placing Shares or Broker Option Shares or the Company or any other person other than the information in this Announcement, such information being all that it deems necessary to make an investment decision in respect of the Placing Shares and (if relevant) the Broker Option Shares; nor has it requested the Brokers, the Company, any of their respective affiliates, agents, directors, officers or employees or any person acting on behalf of any of them to provide it with any such information;

5        none of the Brokers nor any person acting on their behalf nor any of their affiliates, or their or their respective affiliates, agents, directors, officers or employees, has or shall have any liability for this Announcement or any other Publicly Available Information, or any representation relating to the Company, provided that nothing in this paragraph excludes the liability of any person for fraudulent misrepresentation made by that person;

6        the content of this Announcement and the Publicly Available Information has been prepared by and is exclusively the responsibility of the Company and that none of the Brokers nor any persons acting on their behalf are responsible for or have or shall have any liability for any information or representation, warranty or statement relating to the Company contained in this Announcement or any other Publicly Available Information, nor will they be liable for any Placee's decision to participate in the Placing based on any information, representation, warranty or statement contained in this Announcement, any other Publicly Available Information or otherwise. Nothing in this Appendix shall exclude any liability of any person for fraudulent misrepresentation;

7        it is not, and at the time Admission becomes effective will not be, a resident of Australia, South Africa, New Zealand, or Japan;

8          unless it has completed a Subscription Agreement, acknowledges that it is not, and at the time the Placing Shares (or the Broker Option Shares, as the case may be) are acquired will not be, a resident of Canada;

9        the Placing Shares and any Broker Option Shares are being offered and sold outside the United States only in "offshore transactions" as defined in, and in accordance with, Regulation S under the Securities Act. Unless it is a QIB acquiring Placing Shares pursuant to an exemption from the registration requirements of the Securities Act in a transaction not involving a "public offering", it and any account for which it is acting is outside the United States and acquiring the Placing  Shares in an "offshore transaction" as defined in, and in accordance with, Regulation S under the Securities Act;

10        it understands that the Placing Shares have not been and will not be registered under the Securities Act or under the applicable securities laws of any state or other jurisdiction of the United States and that (i) the Placing Shares and any Broker Option Shares are being offered and sold outside the United States in offshore transactions" as defined in, and in accordance with, Regulation S; and (ii) in the United States only to persons who are QIBs pursuant to an exemption from the registration requirements of the Securities Act in a transaction not involving a "public offering";

11      (i) the only information on which it is entitled to rely and on which it has relied in committing to subscribe for the Placing Shares or Broker Option Shares (as the case may be) is contained in this Announcement, the Publicly Available Information such information being all that it deems necessary to make an investment decision in respect of the Common Shares and it has made its own assessment of the Company, the Common Shares and the terms of the Placing based on Publicly Available Information, (ii) Brokers and the Company (or any of their respective affiliates) have not made any representation to it, express or implied, with respect to the Company, the Placing, the Placing Shares or any Broker Option Shares or the accuracy, completeness or adequacy of the Publicly Available Information, (iii) it has conducted its own investigation of the Company, the Placing and the Common Shares, satisfied itself that the information is still current and relied on that investigation for the purposes of its decision to participate in the Placing and (iv) it has not relied on any investigation that the Brokers or any person acting on their behalf may have conducted with respect to the Company, the Placing or the Placing Shares (or the Broker Option Shares);

12      neither the Placing Shares nor the Broker Option Shares have been registered or otherwise qualified, and will not be registered or otherwise qualified, for offer and sale nor will a prospectus be cleared or approved in respect of any of the Placing Shares or Broker Option Shares under the securities laws of the United States, or any state or other jurisdiction of the United States, nor approved or disapproved by the US Securities and Exchange Commission, any state securities commission or other regulatory authority in the United States, nor have any of the foregoing authorities passed upon or endorsed the merits of the Placing or the accuracy or adequacy of this Announcement.  The Placing Shares and Broker Option Shares have not been registered or otherwise qualified for offer and sale nor will a prospectus be cleared or approved in respect of the Placing Shares or Broker Option Shares under the securities laws of Canada, Australia, South Africa, New Zealand or Japan and, subject to certain exceptions, may not be offered, sold, taken up, renounced or delivered or transferred, directly or indirectly, within the United States, Australia, Canada, South Africa, New Zealand or Japan or in any country or jurisdiction where any action for that purpose is required;

13      it and/or each person on whose behalf it is participating:

(a)      is entitled to acquire Placing Shares (or Broker Option Shares, as the case may be) pursuant to the Placing under the laws and regulations of all relevant jurisdictions;

(b)      has fully observed such laws and regulations;

(c)      has capacity and authority and is entitled to enter into and perform its obligations as an acquirer of Placing Shares (or Broker Option Shares, as the case may be) and will honour such obligations; and

(d)      has obtained all necessary consents and authorities (including, without limitation, in the case of a person acting on behalf of a Placee, all necessary consents and authorities to agree to the terms set out or referred to in this Appendix) to enable it to enter into the transactions contemplated hereby and to perform its obligations in relation thereto;

14      it will not distribute, forward, transfer or otherwise transmit this Announcement or any part of it, or any other presentational or other materials concerning the Placing in or into the United States (including electronic copies thereof) to any person, and it has not distributed, forwarded, transferred or otherwise transmitted any such materials to any person;

15      the Placing Shares (or Broker Option Shares, as the case may be) may not be sold, transferred or otherwise disposed on the TSX or, except pursuant to an exemption from prospectus requirements under Canadian securities laws, to any person in Canada, on the TSX or otherwise into Canada, for a period of four months plus one day from the date of completion of the Placing;

16      none of the Brokers, their affiliates and any person acting on their behalf is making any recommendations to it, advising it regarding the suitability of any transactions it may enter into in connection with the Placing and that participation in the Placing is on the basis that it is not and will not be a client of any Broker and that no Broker has any duties or responsibilities to it for providing the protections afforded to the Brokers' clients or customers or for providing advice in relation to the Placing nor in respect of any representations, warranties, undertakings or indemnities contained in the Agency Agreement nor for the exercise or performance of any of its rights and obligations thereunder including any rights to waive or vary any conditions or exercise any termination right;

17      it will make payment to the Relevant Broker (or as the Relevant Broker may direct) for the Placing Shares (or Broker Option Shares, as the case may be) allocated to it in accordance with the terms and conditions of this Announcement on the due times and dates set out in this Announcement or in the Subscription Agreement, as the case may be, failing which the relevant Placing Shares (or Broker Option Shares, as the case may be) may be placed with others on such terms as the Relevant Broker may determine in their absolute discretion without liability to the Placee and it will remain liable for any shortfall below the net proceeds of such sale and the placing proceeds of such Placing Shares (or Broker Option Shares, as the case may be) and may be required to bear any stamp duty or stamp duty reserve tax (together with any interest or penalties due pursuant to the terms set out or referred to in this Announcement) which may arise upon the sale of such Placee's Common Shares on its behalf;

18      its allocation (if any) of Placing Shares (or Broker Option Shares, as the case may be) will represent a maximum number of Placing Shares (or Broker Option Shares, as the case may be) which it will be entitled, and required, to acquire or subscribe for, and that it may be called upon to acquire or subscribe for a lower number of Placing Shares and/or Broker Option Shares (if any), but in no event in aggregate more than the aforementioned maximum;

19      no action has been or will be taken by any of the Company, the Broker or any person acting on behalf of the Company or the Brokers that would, or is intended to, permit a public offer of the Placing Shares or Broker Option Shares in the United States or in any country or jurisdiction where any such action for that purpose is required;

20      the person who it specifies for registration as holder of the Placing Shares (or Broker Option Shares, as the case may be) will be (i) the Placee or (ii) a nominee of the Placee, as the case may be. The Brokers and the Company will not be responsible for any liability to stamp duty or stamp duty reserve tax resulting from a failure to observe this requirement. It agrees to acquire Placing Shares or Broker Option Shares pursuant to the Placing on the basis that the Placing Shares or Broker Option Shares may be allotted to a CREST stock account of the Relevant Broker who will hold them as nominee directly or indirectly on behalf of the Placee until settlement in accordance with its standing settlement instructions with it or in accordance with the applicable Subscription Agreement, as the case may be;

21      the allocation, allotment, issue and delivery to it, or the person specified by it for registration as holder, of Placing Shares (or Broker Option Shares, as the case may be) will not give rise to a stamp duty or stamp duty reserve tax liability under (or at a rate determined under) any of sections 67, 70, 93 or 96 of the Finance Act 1986 (depository receipts and clearance services) and that it is not participating in the Placing as nominee or agent for any person or persons to whom the allocation, allotment, issue or delivery of Placing Shares (or Broker Option Shares, as the case may be) would give rise to such a liability;

22      it and any person acting on its behalf falls within Article 19(5) and/or 49(2) of the Order, as amended, and undertakes that it will acquire, hold, manage and (if applicable) dispose of any Placing Shares (or Broker Option Shares, as the case may be) that are allocated to it for the purposes of its business only;

23      it has not offered or sold and will not offer or sell any Placing Shares (or Broker Option Shares, as the case may be) to persons in the United Kingdom prior to Admission except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their business or otherwise in circumstances which have not resulted and which will not result in an offer to the public in the United Kingdom within the meaning of section 85 (1) of FSMA;

24      if, within the EEA, it is: (i) a "qualified investor" within the meaning of Article 2(1)(e) of the Prospectus Directive; and (ii) a "professional client" or an "eligible counterparty" within the meaning of Article 4(1)(11) and Article 24(2), (3) and (4), respectively, of Directive 2004/39/EC as implemented into national law of the relevant EEA state;

25      it has only communicated or caused to be communicated and it will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of FSMA) relating to Placing Shares or Broker Option Shares in circumstances in which section 21(1) of FSMA does not require approval of the communication by an authorised person;

26      it has complied and it will comply with all applicable laws with respect to anything done by it or on its behalf in relation to the Placing Shares and Broker Option Shares (including all relevant provisions of MAR, FSMA and the Financial Services Act 2012 in respect of anything done in, from or otherwise involving the United Kingdom);

27      if it is a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive (including any relevant implementing measure in any member state), the Placing Shares (or Broker Option Shares, as the case may be) acquired by it in the Placing will not be acquired on a non-discretionary basis on behalf of, nor will they be acquired with a view to their offer or resale to, persons in a member state of the EEA which has implemented the Prospectus Directive other than qualified investors, or in circumstances in which the express prior written consent of the Relevant Joint Bookrunner has been given to the offer or resale.

28      it has not offered or sold and will not offer or sell any Placing Shares or Broker Option Shares to persons in the European Economic Area prior to Admission except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purpose of their business or otherwise in circumstances which have not resulted and which will not result in an offer to the public in any member state of the EEA;

29      if it has received any confidential price sensitive information about the Company in advance of the Placing, it has not: (a) dealt in the securities of the Company; (b) encouraged or required another person to deal in the securities of the Company; or (c) disclosed such information to any person, prior to the information being made publicly available;

30      none of the Brokers, the Company nor any of their respective affiliates, or their or their respective affiliates' agents, directors, officers or employees, respectively, nor any person acting on behalf of such persons is making any recommendation to it, advising it regarding the suitability of any transaction it may enter into in connection with the Placing nor providing advice in relation to the Placing nor in respect of any representation, warranty, acknowledgement, agreement, undertaking or indemnity contained in the Agency Agreement nor the exercise or performance of any of the Brokers' rights and obligations thereunder including any rights to waive or vary any conditions or exercise any termination right;

31      acknowledges and accepts that the Brokers may, in accordance with applicable legal and regulatory provisions, engage in transactions in relation to the Placing Shares, Broker Option Shares and/or related instruments for their own account for the purpose of hedging their underwriting exposure or otherwise and, except as required by applicable law or regulation, the Brokers will not make any public disclosure in relation to such transactions;

32      it has complied with its obligations in connection with money laundering and terrorist financing under the Proceeds of Crime Act 2002, the Criminal Justice Act 1993, the Terrorism Act 2000, the Terrorism Act 2006 and the Money Laundering Regulations 2007 and any related or similar rules, regulations or guidelines issued, administered or enforced by any government agency having jurisdiction in respect thereof (together the "Regulations") and, if making payment on behalf of a third party, that satisfactory evidence has been obtained and recorded by it to verify the identity of the third party as required by the Regulations and has obtained all governmental and other consents (if any) which may be required for the purpose of, or as a consequence of, such purchase, and it will provide promptly to the Brokers such evidence, if any, as to the identity or location or legal status of any person which the B Brokers may request from it in connection with the Placing (for the purpose of complying with such regulations or ascertaining the nationality of any person or the jurisdiction(s) to which any person is subject or otherwise) in the form and manner requested by the Brokers on the basis that any failure by it to do so may result in the number of Placing Shares that are to be purchased by it or at its direction pursuant to the Placing being reduced to such number, or to nil, as the Brokers may decide at their sole discretion;

33      if within a reasonable time after a request for verification of identity the Brokers have not received such satisfactory evidence, the Brokers may, in their absolute discretion, reject an application for Placing Shares in which event all funds delivered by such Placee to the Brokers (if any) will be returned without interest to the account of the drawee bank from which they were originally debited;

34      its commitment to acquire Placing Shares (and/or Broker Option Shares, as the case may be) on the terms set out in this Announcement will continue notwithstanding any amendment that may in future be made to the terms and conditions of the Placing and that Placees will have no right to be consulted or require that their consent be obtained with respect to the Company's or the Brokers' conduct of the Placing;

35         the Company, the Brokers and others will rely upon the truth and accuracy of the foregoing representations, warranties, acknowledgements and agreements, which are given to each Broker on its own behalf and on behalf of the Company and are irrevocable;

36         if it is acquiring the Placing Shares (or Broker Option Shares, as the case may be) as a fiduciary or agent for one or more investor accounts, it has full power and authority to make, and does make, the foregoing representations, warranties, acknowledgements, agreements and undertakings on behalf of each such accounts;

37      time is of the essence as regards its obligations under this Appendix;

38      any document that is to be sent to it in connection with the Placing will be sent at its risk and may be sent to it at any address provided by it to the Relevant Broker;

39      the Placing Shares (or Broker Option Shares, as the case may be) will be issued subject to the terms and conditions set out in this Appendix and any applicable Subscription Agreement;

40         the Placee has consented to receive information in respect of securities of the Company and other price-affected securities (as defined in FSMA) which makes it an "insider" for the purposes of Part V of FSMA, and it agrees not to deal in any securities of the Company until such time as the inside information (as defined in FSMA) of which it has been made aware has been made public for purposes of FSMA or it has been notified by the Brokers or the Company that the proposed Placing will not proceed and any unpublished price sensitive information of which the Placee is aware has been publicly announced, and, other than in respect of its knowledge of the proposed Placing and the draft Announcement, it has neither received nor relied on any confidential price sensitive information concerning the Company or the Placing Shares;

42         where the Placee is acquiring Placing Shares for one or more managed accounts, represents and warrants that it is authorised in writing by each managed account: (a) to acquire the Placing Shares for each managed account; (b) to make on its behalf the representations, warranties, acknowledgments, undertakings and agreements in this Announcement (including the Appendix); and (c) to receive on its behalf any investment letter relating to the Placing in the form provided to it by the Relevant Broker;

43         in agreeing to subscribe for the Placing Shares the Placee is acting as principal and for no other person and its acceptance of that commitment will not give any other person a contractual right to require the issue by the Company of any of the Placing Shares; 

44         the Placee agrees to be bound by the terms of the articles of incorporation and by-laws of the Company in force immediately after Admission; and

45         this Appendix and all documents into which this Appendix is incorporated by reference or otherwise validly forms a part will be governed by and construed in accordance with English law. All agreements to acquire shares pursuant to the Placing will be governed by English law and the English courts shall have exclusive jurisdiction in relation thereto except that proceedings may be taken by the Company or the Brokers in any jurisdiction in which the relevant Placee is incorporated or in which any of its securities have a quotation on a recognised stock exchange.

By participating in the Placing, each Placee (and any person acting on such Placee's behalf) agrees to indemnify and hold the Company, the Brokers and each of their respective affiliates and each of their and their respective affiliates' agents, directors, officers and employees, respectively, harmless from any and all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of or in connection with any breach of the representations, warranties, acknowledgements, agreements and undertakings given by the Placee in this Appendix and further agrees that the provisions of this Appendix shall survive after completion of the Placing.

The agreement to allot and issue Placing Shares (or Broker Option Shares, as the case may be) to Placees (or the persons for whom Placees are contracting as agent) free of stamp duty and stamp duty reserve tax in the UK relates only to their allotment and issue to Placees, or such persons as they nominate as their agents, directly by the Company. Such agreement assumes that the Placing Shares (or Broker Option Shares, as the case may be) are not being acquired in connection with arrangements to issue depositary receipts or to transfer the Placing Shares (or Broker Option Shares) into a clearance service. If there were any such arrangements, or the settlement related to other dealings in the Placing Shares or Broker Option Shares, stamp duty or stamp duty reserve tax may be payable, for which neither the Company nor the Brokers shall be responsible. If this is the case, Placees should take their own independent advice and they shall notify the Relevant Broker accordingly. In addition, Placees should note that they will be liable for any capital duty, stamp duty and all other stamp, issue, securities, transfer, registration, documentary or other duties or taxes (including any interest, fines or penalties relating thereto) payable outside the UK by them or any other person on the acquisition by them of any Placing Shares, Broker Option Shares or the agreement by them to acquire any Placing Shares or Broker Option Shares and each Placee, or the Placee's nominee, in respect of whom (or in respect of the person for whom it is participating in the Placing as an agent or nominee) the allocation, allotment, issue or delivery of Placing Shares and/or Broker Option Shares has given rise to such non-UK stamp, registration, documentary, transfer or similar taxes or duties undertakes to pay such taxes and duties, including any interest and penalties (if applicable), forthwith and to indemnify on an after-tax basis and to hold harmless the Company and the Brokers in the event that either the Company and/or any Broker have incurred any such liability to such taxes or duties.

The representations, warranties, acknowledgements and undertakings contained in this Appendix are given to each Broker for itself and on behalf of the Company and are irrevocable.

Numis is authorised and regulated by the Financial Conduct Authority in the United Kingdom and is acting exclusively for the Company and no one else in connection with the Placing and Admission and will not regard any other person (whether or not a recipient of this document) as a client in relation to the Placing and will not be responsible to anyone (including Placees) other than the Company for providing the protections afforded to its clients or for providing advice in relation to the Placing or other matters referred to in this Announcement.

H&P is authorised and regulated by the Financial Conduct Authority in the United Kingdom and is acting exclusively for the Company and no one else in connection with the Placing and Admission and will not regard any other person (whether or not a recipient of this document) as a client in relation to the Placing and will not be responsible to anyone (including Placees) other than the Company for providing the protections afforded to its clients or for providing advice in relation to the Placing or other matters referred to in this Announcement.

Sprott Capital Partners, a division of Sprott Private Wealth LP is a member of the Investment Industry Regulation Organization of Canada (IIROC) and a member of the Canadian Investor Protection Fund (CIPF) and is acting exclusively for the Company and will not regard any other person (whether or not a recipient of this document) as a client in relation to the Placing and will not be responsible to anyone (including Placees) other than the Company for providing the protections afforded to its clients or for providing advice in relation to the Placing or other matters referred to in this Announcement.

Each Placee and any person acting on behalf of the Placee acknowledges that none of the Brokers owes any fiduciary or other duties to any Placee in respect of any representations, warranties, undertakings, acknowledgements or agreements or indemnities in the Agency Agreement.

Each Placee and any person acting on behalf of the Placee acknowledges and agrees that each Broker may (at its absolute discretion) satisfy its obligations to procure Placees by itself agreeing to become a Placee in respect of some or all of the Placing Shares and/or Broker Option Shares or by nominating any connected or associated person to do so.

When a Placee or any person acting on behalf of the Placee is dealing with Numis, any money held in an account with Numis on behalf of the Placee and/or any person acting on behalf of the Placee will not be treated as client money within the meaning of the relevant rules and regulations of the Financial Conduct Authority which therefore will not require Numis to segregate such money, as that money will be held by it under a banking relationship and not as trustee.

The price of shares and any income expected from them may go down as well as up and investors may not get back the full amount invested upon disposal of the shares. Past performance is no guide to future performance and persons needing advice should consult an independent financial adviser.

All times and dates in this Announcement may be subject to amendment. The Brokers will notify Placees and any persons acting on behalf of the Placees of any changes.

Neither the content of the Company's website nor any website accessible by hyperlinks on the Company's website is incorporated in, or forms part of, this Announcement.

Definitions

In this Announcement (including the Appendix), save where the context requires otherwise:

Glossary of Technical Terms

 

SOURCE Avesoro Resources Inc.

THIS ANNOUNCEMENT, INCLUDING THE APPENDICES AND THE INFORMATION IN THEM, IS RESTRICTED AND IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO AUSTRALIA, NEW ZEALAND, THE REPUBLIC OF SOUTH AFRICA, HONG KONG, SINGAPORE OR JAPAN OR ANY OTHER JURISDICTION IN WHICH SUCH PUBLICATION, RELEASE OR DISTRIBUTION WOULD BE UNLAWFUL. FURTHER, THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND IS NOT AN OFFER OF SECURITIES IN ANY JURISDICTION.

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR RELEASE, PUBLICATION, DISTRIBUTION OR DISSEMINATION DIRECTLY, OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES.

THE SECURITIES DESCRIBED HEREIN HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933 AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES OR TO A U.S. PERSON ABSENT REGISTRATION OR AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION.



Contact

Avesoro Resources Inc., Geoff Eyre / Nick Smith, Tel: +44(0) 20 3874 4740; Hannam & Partners (Advisory), LLP (Financial Advisor, Joint Bookrunner & Joint Broker), Rupert Fane / Ingo Hofmaier / Ernest Bell, Tel: +44(0) 20 7907 8500; Numis Securities Limited (Nominated Adviser, Joint Bookrunner & Joint Broker), John Prior / James Black / Paul Gillam, Tel: +44(0) 20 7260 1000; Sprott Capital Partners, a division of Sprott Private Wealth LP (Co-Lead Manager), David Wargo / Scott Robertson, Tel: +1 416 945 3318; Camarco (Financial PR Advisor), Gordon Poole / Nick Hennis, Tel: +44(0) 20 3757 4980