Red Hut Metals Negotiates New LOI to Acquire Otú Gold Property in Colombia

News Release

Red Hut Metals Negotiates New LOI to Acquire Otú Gold Property in Colombia

July 24, 2014 TSXV Symbol: ROB

Vancouver, British Columbia – Red Hut Metals Inc. (the “Company” or “Red Hut”) is pleased to announce that it has entered into a new letter of intent with Otu Gold Ltd. (“Otu Gold”) dated July 22, 2014 whereby Red Hut will acquire by way of amalgamation all of the issued and outstanding shares of Otu Gold (the “Transaction”).

Otu Gold is a Bermuda corporation that, directly or through its Colombia based corporate subsidiaries, owns mineral rights over 80,076 hectares in the Segovia Gold Belt, in the Department of Antioquia, in northeastern Colombia (the “Property”).

Description of the Transaction

The Letter of Intent (“LOI”) is intended to govern the conduct of Red Hut and Otu Gold in respect of the proposed Transaction and a proposed concurrent financing (the “Red Hut Financing”). The LOI provides for an exclusive dealing period (the “Exclusivity Period”) commencing on July 22, 2014 and ending on the earlier of the date of closing of the binding definitive agreement (the “Definitive Agreement”) and 45 days, unless otherwise extended by both parties. During the Exclusivity Period, the parties will continue their due diligence investigations in respect of each other, and will proceed with the negotiation and settlement of the terms of the binding Definitive Agreement in respect of the Transaction, including the Red Hut Financing. The parties also agree to cooperate in making application and providing all necessary information to the TSX Venture Exchange (“TSXV”) in order to obtain preclearance of the Transaction and all matters related thereto and will commence the Red Hut Financing which is contemplated to close concurrently with the Transaction.

The Transaction contemplates that Red Hut and Otu Gold will proceed by way of a three corner amalgamation among Otu Gold, the Otu Gold shareholders, Red Hut and a newly incorporated wholly owned subsidiary of Red Hut to be incorporated in Bermuda (“Subco”), pursuant to which (i) Otu Gold and Subco will amalgamate to form a new company (“Amalco”) under Bermuda law; (ii) Amalco will become a wholly owned subsidiary of Red Hut; and (iii) Red Hut will concurrently issue to the Otu Gold shareholders common shares of Red Hut (“Red Hut Shares”) in consideration of Otu Gold amalgamating with Subco.

Suite 750, 580 Hornby Street, Box 113, Vancouver, British Columbia, Canada V6C 3B6 Telephone: (604) 602-4935 � Fax: (604) 602-4936 � E-mail: [email protected] � Website: www.redhutmetals.com

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As consideration for Otu Gold amalgamating with Subco, Red Hut will issue to the Otu Gold shareholders, Red Hut Shares in a number equal to the number of common shares of Red Hut outstanding after the Red Hut Financing (the “Acquisition Shares”); such that on a post-financing and postacquisition basis, the outstanding Red Hut Shares will be held as to 50% by the Otu Gold shareholders, and (i) 27.4% by the participants in the Red Hut Financing, and 22.6% by the existing Red Hut shareholders, assuming the minimum offering of $5 million is realized; and (ii) 33% by the participants in the Red Hut Financing, and 17% by the existing Red Hut shareholders, assuming the maximum offering of $8 million is realized (See below). Additionally, issued and outstanding options and warrants of Otu Gold will be exchanged for options and warrants of Red Hut on an equal basis.

Conditions Precedent

The Transaction is subject to, among other conditions, the following:

(i) the negotiation and execution of Definitive Agreements to replace the LOI;

(ii) Red Hut completing, concurrently with the closing of the Transaction the Red Hut Financing, which is anticipated to be a non-brokered private placement to raise a minimum of $5,000,000 and a maximum of $8,000,000 through the distribution of units (“Units”) at $0.35 per Unit. Each Unit will consist of one Red Hut Share and one-half of one warrant, each warrant entitling the holder to acquire one additional Red Hut Share at $0.50 for two years (subject to acceleration should Red Hut’s shares trade at $0.75 or more for 20 consecutive trading days);

(iii) Red Hut will grant to the Otu Gold shareholders, for a period of three years following the date of closing the Transaction, the right to receive additional Red Hut Shares as the value of the Property is proven-up, such that Red Hut will issue 1,000,000 Red Hut Shares upon a minimum of 3,000,000 ounces of gold (determined as “inferred resource” or better, as confirmed in NI-43- 101 compliant reports prepared by independent qualified persons) being confirmed within the Property, and an additional 1,000,000 Red Hut Shares upon at least 4,000,000 ounces of gold being determined;

(iv) upon the closing date of the Transaction (the “Closing Date”), certain directors and officers of Red Hut will resign and individuals nominated by Otu Gold will be appointed. The directors of Red Hut will also be the directors of Amalco; and

(v) Red Hut will change its name to such name as may be approved by the parties and as acceptable to the TSXV.

About the Property

The Property comprises over 80,076 ha and covers a roughly rectangular area of 75 km x 10 km. The town of Zaragoza occurs in the northernmost portion of the property which is connected by dirt road to the town of Segovia 45 km to the south. A paved highway exists between Segovia and Medellin, a city with a population of 3.5 million. The Property is situated in a low mountain zone between the Central Cordillera of the Columbian Andes and the Sierra San Lucas mountain range. Elevations throughout the claims area ranges from 150m in the north to 700m in the central portion.

The Property is underlain by the mid to late Jurassic Segovia Batholith to the east which is in contact with a predominantly metasedimentary greenschist to lower amphibolite grade metamorphic complex to the

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west. The Otú Fault marks the contact between the batholith and the metasedimentary complex and the Nus Fault occurs along the eastern side of the batholith. The faulting history is complex with multiple movements along the faults.

Gold mineralization in the area is structurally controlled and most of the known auriferous veins occur within 2 km of the Otú fault. It is common for the vein systems to extend for over a kilometre in strike in a north – south direction parallel to the Otú fault although significant mineralized veins also occur at high angles to the principal direction. Dips are generally 30 – 40^o but mineralized veins can occur at steep angles as well. The veins consist of a quartz (minor calcite) gangue with generally coarse grained pyrite, sphalerite and galena. The thickness of the mineralized veins is typically < 1 metre but can reach several metres. Although few of the mines in the area have been mined to significant depths, the El Silencio mine of Frontino Gold Mines has been worked to a down dip depth of 1600 metres (815m vertical) and is open at depth. Grades of the veins average 6 – 12 grams per tonne (gpt) Au and can exceed 20 gpt Au as at the Quintana Mine which contained a JORC compliant resource estimate of 109,852 tonnes at 25.58 gpt Au, 19.85 gpt Ag containing 86,822 ounces of gold.

Red Hut is awaiting the completion of a NI 43-101 report on the Property; and additional details concerning the Property will be released at that time.

David Gunning, P.Eng., is the Qualified Person as defined by National Instrument 43-101 who has reviewed and approved the technical content of this release.

Reverse Takeover

The Transaction was negotiated at arm’s length. The Transaction will be a reverse take-over (RTO) under TSXV policies, and as a result (i) the Transaction will require approval of the Exchange and the Company’s shareholders; (ii) the Acquisition Shares held by new “principals” will be subject to such escrow requirements as may be imposed by the Exchange (expected to be three years pursuant to a Value Security Escrow Agreement); (iii) the Company may be required to engage a sponsor; and (iv) the Company’s common shares will remain halted on the Exchange until the Transaction has closed.

The Company intends to make application to the TSXV for waiver of the condition to engage a sponsor, however, there is no assurance such waiver will be obtained.

General

Additional details of the principal shareholders of Otu Gold, and a summary of the financial statements of Otu Gold will follow in a subsequent news release. Full particulars of the Transaction will be set out in an Information Circular to be prepared, disseminated and filed on SEDAR in connection with the shareholders’ meeting to be called by the Company to approve the Transaction.

Subject to regulatory approval, a finder’s fee of 4.5% of the value of the Transaction will be paid to Jordan Capital Markets Inc. (“Jordan”) in respect of the Transaction, in the form of Red Hut Shares, which will be voluntarily restricted by Jordan for a period of one year from the date of issuance.

In connection with the Red Hut Financing, subject to regulatory approval, finders will be entitled to a finder’s fee of no more than 6% paid in cash and 6% finder’s warrants, based on the gross proceeds of the financing.

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The proposed Transaction is subject to shareholder and regulatory approval. Red Hut will be calling a shareholders meeting once a definitive agreement has been executed by the parties.

ON BEHALF OF THE BOARD

Signed “Robert Eadie”

Robert Eadie, President, Chief Executive Officer and Director

FOR FURTHER INFORMATION PLEASE CONTACT: Robert Eadie Telephone: 1-604-602-4935 Facsimile: 1-604-602-4936 Website: www.redhutmetals.com

Completion of the transaction is subject to a number of conditions, including Exchange acceptance and disinterested Shareholder approval. The transaction cannot close until the required Shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the Management Information Circular to be prepared in connection with the transaction, any information released or received with respect to the RTO may not be accurate or complete and should not be relied upon. Trading in the securities of Red hut Metals Inc. should be considered highly speculative.

The TSX Venture Exchange has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.

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

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION: This news release includes certain “forward-looking statements” under applicable Canadian securities legislation. Forward-looking statements include, but are not limited to, statements with respect to: the terms and conditions of the proposed Transaction; the terms and conditions of the proposed Red Hut Financing; future management; and the business and operations of Red Hut after the proposed Transaction. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Specifically, there is no assurance the Transaction will close on the terms and conditions outlined above, or at all; there is no assurance the Company will be able to satisfy all conditions precedent to close the Transaction, including raising sufficient funds under the proposed Red Hut Financing. Accordingly, readers should not place undue reliance on forwardlooking statements. Red Hut disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.