KAPA Capital Inc. Enters into Arrangement Agreement for Qualifying Transaction with Quantus Resources Corp.

KAPA Capital Inc.

2475 Queens Avenue

West Vancouver, BC V7V 2Y9

Quantus Resources Corp.

Registered Office:

Suite 1400 – 1125 Howe Street

Vancouver, BC V6Z 2K8

KAPA Capital Inc. Enters into Arrangement Agreement for Qualifying Transaction with Quantus

Resources Corp.

September 24, 2020: KAPA Capital Inc. (TSX-V: KAPA.P) (“ KCI”) and Quantus Resources Corp.

(“Quantus”) are pleased to announce that they have en tered into an acquisition agreement and an

arrangement agreement (the “ Arrangement Agreement ”) both dated September 22, 2020, pursuant to

which KCI has agreed to acquire all of the issued and outstanding common shares of Quantus (the

“Qualifying Transaction ”). Quantus is a privately held company incorporated under the laws of the

province of British Columbia that owns a mineral e xploration property near the Lucerne Valley in San

Bernardino County, California. Quantus holds an op tion to earn a 100% interest, subject to certain

royalties, in the Blackhawk Property, a natural res ource exploration and development project targeting

gold and other metals and minera ls located near the Lucerne Valley in San Bernardino County,

California. Under the Arrangement, Quantus sha ll make a final payment of 750,000 common shares

completing all option payment obligations and in doing so, earn a 100% interest in the Blackhawk

Property subject to certain royalties upon production.

KCI is a “Capital Pool Company” as defi ned by TSX Venture Exchange Policy 2.4 – Capital Pool

Companies (“Policy 2.4 ”), and the Qualifying Transaction is intended to constitute KCI’s “Qualifying

Transaction” in accordance with Policy 2.4. KCI, af ter completion of the Qualifying Transaction, is

referred to in this news release as the “Resulting Issuer”. Upon completion of the Qualifying Transaction,

the parties anticipate that the resulting issuer will be listed as a Tier 2 Resource Issuer on the Exchange.

The Qualifying Transaction is arm’s length and is therefore not a Non-Arm’s Length Qualifying

Transaction under the CPC Policy. Accordingly, the CPC Policy does not require KCI to obtain

shareholder approval of the Qualifying Transaction.

Details of the Arrangement

The Qualifying Transaction will be effected by way of a court approved plan of arrangement under the

Business Corporations Act (British Columbia). Under the terms of the Arrangement Agreement, each

shareholder of Quantus will receive one (1) common shar e in the capital of KCI in exchange for one (1)

Quantus common share. Assuming completion, none of the options of share purchase warrants of

Quantus being exercised prior to closing of the Qu alifying Transaction, KCI will issue a total of up to

53,402,273 KCI shares to the shareholders of Quan tus. Following the completion of the Qualifying

Transaction, the resulting issuer will have 59,402, 274 issued and outstanding shares. Prior to the

execution of the plan of arrangement KCI shall undergo a subdivision of its share capital on the basis of

1.2 new common shares for each old common share held.

The completion of the Qualifying Transaction is subject to the satisfaction of certain conditions being met

including but not limited to: (i) the filing of the draft completed TSX Venture Form 3B2 (Information

Required in a Filing Statement for a Qualifying Tran saction; (ii) public filing of the NI 43-101F1 Report

on the Blackhawk Property; (iii) public filing of th e Fairness Opinion; (iv) conditional approval of the

TSX Venture in respect of the Arrangement Agreem ent; (v) the completion of a non-brokered private

placement by Quantus (the “Concurrent Financing”).

Concurrent with the Qualifying Transaction, Quantus is proposing to complete the Concurrent Financing

of up to 14,000,000 Quantus common shares for aggreg ate gross proceeds of up to $2,800,000. Assuming

the Concurrent Financing is completed, subscriber s to the Concurrent Financing will hold, as a group,

approximately 23.6% of the Resulting Issuer’s common shares.

The Arrangement Agreement is subject to final approval of the Supreme Court of British Columbia and is

conditional upon the Resulting Issuer receiving approval for listing on the TSX Venture Exchange.

On Behalf of Quantus’ Board On Behalf of KCI’s Board

“David K. Paxton” “Charalambos Katevatis”

David K. Paxton Char alambos Katevatis

CEO and Director President, CEO and Director

For further information contact Charalambos Katevatis at 604 836-6667 or email: [email protected]

“Statements in this press release regarding KCI whic h are not historical facts are “forward-looking

statements” that involve risks and uncertainties, su ch as the completion of the proposed Qualifying

Transaction. Such information can generally be identified by the u se of forwarding-looking wording

such as “may”, “expect”, “estimate”, “antici pate”, “intend”, “believe” and “continue” or the

negative thereof or similar variations. Since forw ard-looking statements address future events and

conditions, by their very nature, th ey involve inherent risks and uncertain ties such as the risk that the

closing may not occur for any reason. Forwarding-l ooking statements in this news release include the

statements that: (i) the parties anticipate that th e Resulting Issuer will be listed as a Tier 2 Resource

Issuer and (ii) list out the terms of the Quantus Financing.

Actual results in each case could differ materially fr om those currently anticipat ed in such statements

due to factors such as: (i) the decision to not clo se the Qualifying Transaction for any reason, including

adverse due diligence results and Exchange refusal of the Qualifying Transaction; (ii) adverse market

conditions; and (iii) the need for additional financing. Except as required by law, KCI does not intend

to update any changes to such statements.

Completion of the Qualifying Transaction is subject to a number of conditions, including but not limited

to, Exchange acceptance and if applicable pursuant to Exchange Requirements, majority of the minority

shareholder approval. Where applicable, the Qualify ing Transaction cannot close until the required

shareholder approval is obtained. There can be no assurance that the Qualifying Transaction will be

completed as proposed or at all.

Investors are cautioned that, except as disclosed in the management information circular or filing

statement to be prepared in connec tion with the transaction, any info rmation released or received with

respect to the Qualifying Transaction may not be accu rate or complete and sh ould not be relied upon.

Trading in the securities of a capital pool company should be considered highly speculative.

The TSX Venture Exchange Inc. has in no way passe d upon the merits of the proposed transaction and

has neither approved nor disapproved the contents of this press release.

Neither TSX Venture Exchange nor its Regulation Servi ces Provider (as that t erm is defined in the

policies of the TSX Venture Exchange) accepts res ponsibility for the adequacy or accuracy of this

release.