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Chantrell Ventures Signs Share Purchase Agreement with Chalice Gold Mines

Chantrell Ventures Corp. takes immense pleasure in announcing that it has entered a binding share purchase agreement (SPA) with Chalice Gold Mines Limited to obtain the latter’s completely-owned subsidiary Chalice Gold Mines (Quebec) Inc. (CGMQ).

CGMQ is the registered owner of the Kinebik Gold Project and the East Cadillac Project in Quebec, Canada. Furthermore, CGMQ owns the underlying Option Agreements on the East Cadillac Gold Project with Renforth Resources Inc. and Globex Mining Enterprises Inc.

In addition, the transaction will depend on the approval of the TSX Venture Exchange.

Key Terms

Chantrell is involved in an arrangement agreement dated on May 14, 2019 (the “Arrangement Resolution”) between Chantrell and Osisko Mining Inc., following which, Chantrell will also obtain certain non-core assets of Osisko Mining in exchange for common shares of Chantrell (“Shares”) through a court-approved plan of arrangement under the Business Corporations Act (Ontario) (the “Arrangement”).

The Arrangement will lead to the reverse takeover of Chantrell by Osisko Mining Inc., pursuant to which the Corporation will be renamed as “O3 Mining Inc.” (the “Resulting Issuer”) and rescheduled as part of the Arrangement. Chantrell stakeholders approved the Arrangement on June 28th, 2019. Completion of the Arrangement is a condition prior to completion of the SPA with Chalice Gold Mines Limited.

Under the SPA, Chalice Gold Mines Limited will sell all pending shares in its fully owned subsidiary CGMQ, to the Resulting Issuer. It will obtain 3,092,784 common shares of the Resulting Issuer, at an estimated value of C$3.88 per common share, for a total of C$12 million in consideration.

As per the limitations under Canadian securities laws and conditional on certain exceptions, Chalice Gold Mines Limited will be restricted from trading these shares for a time period of four months from the date of issuance.

After the transaction is closed, Chalice Gold Mines Limited will hold a 1.0% NSR royalty on all wholly-owned claims on both projects that are not conditional on a pre-existing royalty. At present, CGMQ has about C$1.3 million in tax credits and, under the SPA, the Resulting Issuer will repay Chalice Gold Mines Limited any amounts collected, given that such amounts are collected from Canadian tax authorities during an agreed post-closing time.

Closing will depend on several conditions, and approvals, such as, among other things, any obligatory approval of Chalice shareholders, and completion of the Arrangement. Closing is expected to take place in early Q3 2019.

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