Temas Files Technical Report and Clarifies Information Circular Regarding Requirements for Minority Approval

Temas Files Technical Report and Clarifies Information Circular Regarding Requirements

for Minority Approval

August 27, 2020 – Temas Resources Corp. (the “ Temas”) (CSE: TMAS) issues this clarifying

news release, as requested by the Ontario Securities Commission (“OSC”) with respect to the

Company’s notice of annual general and special meeting of shareholders (the “ Meeting”)

originally scheduled to be held on August 25, 2020, and management information circular dated

July 24, 2020 (the “Information Circular”).

In the Information Circular, the board of directors (“ Board”) of the Company proposed a

resolution approving the acquisition (the “ Transaction”) of the La Blache Property (the

“Property”) from CloudBrea k Discovery Corp. (“CloudBreak”) and Croni n Services Ltd.

(“Cronin” and, together with CloudBreak, the “Vendors”).

Technical Report

The Company announces that it has filed on SEDAR an independent technical report (the

“Technical Report”) prepared in accordance with National Instrument 43 -101 – Standards of

Disclosure for Mineral Projects (“NI 43-101”) in respect of the Property.

The full Technical Report with an effective date of August 20, 2020 is entitled “2020 Technical

(NI 43-101) report on La Blache Property ”. It was prepared by Rory Kutlu oglu, P. Geo., who is

independent of the Company and is a qualified person within the meaning of NI 43-101.

The Technical Report can be found under the Company’s issuer profile at www.sedar.com and the

Company’s website.

As noted elsewhere in this news release, the Company wishes to clarify that the Technical Report

does not include a current resource estimate and does not constitute a preliminary economic

assessment on the Property.

In those instances where the Company has retracted, revised, clarified or updated previous

disclosure, the Company advises readers not to rely on such statements as they may continue to be

found in the public domain.

Information Circular Deficiencies

The OSC has requested that the Company provide clarifications in relation to deficiencies relating

to: (1) the nature of the related parties and their interests in the Company and the Vendors, and (2)

the rationale for and background to the Transaction.

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1. Nature of the Related Parties and their Interests in the Company and the Vendors

The Company hereby supplements the Information Circular disclosure to clarify the nature of the

related parties (the “ Related Parties ”) and their interests in the Company and the Vendors as

follows:

Related Party Relationship with

the Company

Relationship with

CloudBreak

Relationship with

Cronin

Kyler Hardy Director

Officer

4.3% shareholder

Director

46.1% shareholder

Director

Officer

77.5% shareholder

David Robinson Officer

1.8% shareholder

Officer Officer

10% shareholder

As a result of the Transaction, each of the Vendors will acquire 10,000,000 common shares in the

capital of the Company. Mr. Hardy is a shareholder of CloudBreak and Cronin, and Mr. Robinson

is a shareholder of Cronin. While the Related Parties’ direct interests in the Company will not

change as a result of the Transaction, Mr. Hardy will beneficially own and have control and

direction over 11,570,000 common shares of the Company, representing approximately 20.55%

of the then issued and outstanding common shares of the Company f ollowing closing of the

Transaction.

2. Rationale for and Background to the Transaction

The following is a summary of the material events, meetings, negotiations and discussions among

the parties that preceded the public announcement of the Transaction.

The Company’s strategic objective is to acquire , explore and develop of iron, titanium and

vanadium properties in Canada (the “Strategic Objective”). Management and the Board regularly

consider, monitor and investigate opportunities to enhance shareholder value, with reference to the

Strategic Objective . Management and the Board also regularly review and consider market

conditions, including commodity prices and other factors that affect the business, operations and

affairs of the Company including its growth and sustainability.

Following completion of the Company’s listing on the Canadian Securities Exchange on May 19,

2020, the Board investigated various opportunities including potential strategic transactions with

various industry participants and other interested parties. Management and the Board review ed

and considered such transactions to determine whether pursuing them would be in the best interest

of the Company and accomplish the Strategic Objec tive. In June 2020, after evaluation of the

Company’s current business, financial positio n and future plans and prospect s, Mr. Hardy

suggested that the Board consider an acquisition of the Property.

Subsequently, the Company’s two independent directors, b eing Konstantin Lichtenwald and

Michael Rowley (the “Independent Directors”), were authorized to review the Transaction and

engage in negotiations on behalf of the Company with respect to the Transaction.

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During the course of their review of the Transaction, the Independent Directors had discussions in

June, 2020. Among the documents reviewed by the Independent Directors was a report prepared

by SGS Canada Inc. (“SGS”) entitled “NI 43-101 Technical Report: Resource Estimation of the

La Blache Project, Cote-Nord, Quebec, Canada” and dated May 14, 2012 (the “SGS Report”).

The SGS Report was prepared for and filed on SEDAR by Nevado Resources Corporation

(“Nevado”) at a time when the Property was owned by Nevado. Among other things, the SGS

Report included a resource estimate (the “Historical Resource Estimate”) and concluded that the

Property justified additional work.

The Independent Directors also considered, among other things:

 Arm’s Length Negotiations . The Agreed Terms were negotiated at arm’s length between

the Indepen dent Directors and the Vendors and were consistent with the Inde pendent

Director’s assessment of the fair market value of the Property.

 Strategic Rationale. An acquisition of the Property fits with the Strategic Objective.

 Access to Capital. The Company’s ability to make use of the public market to raise capital

is likely to be significantly enhanced following closing of the Transaction.

 Shareholder Approval. The Transaction must be approved by at least a simple majority of

the votes cast on the resolution by shareholders of the Company, excluding the Related

Parties.

 Technical Merits. The Company believes that the Property may be prospective for iron ore,

titanium, and vanadium oxide. The Property is situated close to existing infrastructure.

The Independent Directors also considered the contents of the SGS Report, including the

existence of the Historical Resource Estimate. When reviewing the S GS Report, the

Independent Directors considered the Historical Resource Estimate as a historical estimate

and not as a current mineral resource. The Historical Resource Estimate was not verified

by a qualified person and insufficient work was done to class ify the historical estimate

relative to current mineral resources. It should only be considered has an indication of the

iron-titanium mineral potential on the Property. The Company is not treating the Historical

Resource Estimate as a current mineral resource.

The Company notes that the Information Circular erroneously stated that the Property has

a “positive PEA”. The references to “positive PEA” are hereby retracted.

The Independent Directors discussed the anticipated benefits of the Transaction to the Company

and its stakeholders and weighed these against the associated risks and negative factors, including

the risks to the Company if the Transaction is not completed, including the costs to the Company

in pursuing the Transaction, the diversion of management’s attention away from conducting

the Company’s business in the ordinary course and the potential impact on the Company’s

current business relationships (including with future and prospective employees, suppliers and

partners).

The Independent Directors concluded that, overall, the anticipated benefits of the Arrangement to

the Company outweighed these risks and negative factors . Ultimately, as disclosed in the

Information Circular, the Independent Directors determined that the Transaction is in the best

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interests of the Company and that they would recommend that shareholders of the Company vote

in favour of the Transaction.

The foregoing summary of the information and factors considered by the Independent Directors is

not intended to be exhaustive, but includes the material information and factors considered by the

Independent Directors in its consideration of the Transaction. In view of the variety of factors and

the amount of information considered in connection with the Independent Directors’ evaluation of

the Transaction, they did not find it practicable to, and did not, quantify or otherwise attempt to

assign any relative weight to each of the specific factors considered in reaching its conclusions and

recommendations. The recommendation of the Independent Directors was made after

consideration of all of the above -noted and other factors and in light of its knowledge of the

business, financial condition and prospects of the Company. In addition, individual Independent

Directors may have assigned different weights to different factors.

In June 2020, the Independent Directors and Mr. Hardy (in his capacity as a representative of the

Vendors) negotiated the terms of the Transaction. It was agreed that the Company would issue,

pay and grant the following to the Vendors in consideration for the Property: (a) issue an aggregate

of 20,000,000 common shares in the capital of the Company (the “ Payment Shares”), (b) pay

$60,000 and (c) grant a 2% net smelter returns royalty (the “Agreed Terms”). The Payment Shares

will be subject to pooling restrictions as follows: 25% will be released from pool on the date that

is six months after the closing of the Transaction, and 75% of the Payment Shares will be released

from pool on the date that is 12 months after such date. Mr. Hardy was instructed to work with the

Company’s legal counsel to prepare a purchase agreement (the “Purchase Agreement”) to be

entered into with the Vendors in respect of the Transaction, reflecting the Agreed Terms.

On June 18, 2020, the Company announced that it had entered into the Purchase Agreement.

Postponement of Meeting

The Company announces that the Meeting has been postponed and rescheduled to September 18,

2020 at 10:00 a.m. (Vancouver time). The record date of the Meeting will remain July 21, 2020

and the location of the Meeting will remain the same.

Qualified Person

Rory Kutluoglu, B.Sc, P.Geo, is the Qualified Person as defined by NI 43-101 who has reviewed

and approved the technical information contained within this press release.

About Temas Resources Corp.

Temas Resources Corp. is a mineral exploration company focused on the acquisition, exploration

and development of Iron, Titanium and Vanadium properties in Canada. The Company has an

option to acquire a 100% interest in the DAB Property which consists of 128 co ntiguous mineral

claims which cover 6813.72 hectares (68.14 km2) within the Grenville Geological Province located

in Quebec, Canada.

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On behalf of the Board of Directors of Temas Resources Corp.,

“Kyler Hardy”

CEO, Director

Contact Information

For more information, please contact:

Kyler Hardy – Chief Executive Officer

E-mail: [email protected]

Forward Looking Statements

This news release includes certain “Forward‐Looking Statements” within the meaning of the

United States Private Securities Litigation Reform Act of 1995 and “forward‐looking information”

under applicable Canadian securities laws. When used in this news release, the words

“anticipate”, “believe”, “estimate”, “expect”, “target”, “plan”, “forecast”, “may”, “would”,

“could”, “schedule” and similar words or expressions, identify forward‐looking statements or

information. These forward‐looking statements or information relate to, among other things:

closing of the Transaction, the Company’s plan to build an advanced base and special metal s

portfolio, the development of the Property, including drilling activities; and future mineral

exploration, development and production.

Forward‐looking statements and forward‐looking information relating to any future mineral

production, liquidity, enhanced value and capital markets profile of Temas, future growth potential

for Temas and its business, and future exploration plans are based on management’s reasonable

assumptions, estimates, expectations, analyses and opinions, which are based on management’ s

experience and perception of trends, current conditions and expected developments, and other

factors that management believes are relevant and reasonable in the circumstances, but which

may prove to be incorrect. Assumptions have been made regarding, among other things, the price

of silver, gold and other metals; no escalation in the severity of the COVID-19 pandemic; costs of

exploration and development; the estimated costs of development of exploration projects; Temas’

ability to operate in a safe and effective manner and its ability to obtain financing on reasonable

terms.

These statements reflect Temas ’ respective current views with respect to future events and are

necessarily based upon a number of other assumptions and estimates that, while considered

reasonable by management, are inherently subject to significant business, economic, competitive,

political and social uncertainties and contingencies. Many factors, both known and unknown,

could cause actual results, performance or achievements to be materially different from the results,

performance or achievements that are or may be expressed or implied by such forward‐looking

statements or forward-looking information and Temas has made assumptions and estimates based

on or related to many of these factors. Such factors include, without limitation: the Company’s

dependence on one mineral project; preciou s metals price volatility; risks associated with the

conduct of the Company’s mining activities in Quebec; regulatory, consent or permitting delays;

risks relating to reliance on the Company’s management team and outside contractors; risks

regarding mineral resources and reserves; the Company’s inability to obtain insurance to cover

all risks, on a commercially reasonable basis or at all; currency fluctuations; risks regarding the

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failure to generate sufficient cash flow from operations; risks relating to p roject financing and

equity issuances; risks and unknowns inherent in all mining projects, including the inaccuracy of

reserves and resources, metallurgical recoveries and capital and operating costs of such projects;

contests over title to properties, particularly title to undeveloped properties; laws and regulations

governing the environment, health and safety; the ability of the communities in which the Company

operates to manage and cope with the implications of COVID -19; the economic and financial

implications of COVID-19 to the Company; operating or technical difficulties in connection with

mining or development activities; employee relations, labour unrest or unavailability; the

Company’s interactions with surrounding communities and artisanal miners; the Company’s

ability to successfully integrate acquired assets; the speculative nature of exploration and

development, including the risks of diminishing quantities or grades of reserves; stock market

volatility; conflicts of interest among certain direc tors and officers; lack of liquidity for

shareholders of the Company; litigation risk; and the factors identified under the caption “Risk

Factors” in Temas’ management discussion and analysis. Readers are cautioned against

attributing undue certainty to fo rward‐looking statements or forward -looking information.

Although Temas has attempted to identify important factors that could cause actual results to differ

materially, there may be other factors that cause results not to be anticipated, estimated or

intended. Temas does not intend, and does not assume any obligation, to update these forward‐

looking statements or forward-looking information to reflect changes in assumptions or changes

in circumstances or any other events affecting such statements or inform ation, other than as

required by applicable law.