Potential disposal of Zebediela Project

13 January 2021

URU Metals Limited

Potential disposal of Zebediela Project

URU Metals Limited ("URU" or "Company") (LON: URU) has entered into a letter of intent, dated 7 January 2021, with Blue Rhino Capital Corp, a company listed on the TSX Venture Exchange ("TSX-V") (TSX-V: RHNO.P) ("BRC") whereby BRC proposes to acquire all of the issued and outstanding share capital of Zebediela Nickel Company (Pty) Ltd. ("ZEB"), which controls the Company's Zebediela Nickel Project in South Africa (the "Project").

Transaction Summary

Pursuant to the terms of the Transaction, it is contemplated that BRC will consolidate its share capital on a 2.3-for-1 basis (the "Consolidation"), following which it will issue 41,000,000 post-Consolidation common shares (the "Consideration Shares") to URU in consideration for all of the outstanding share capital of ZEB.  BRC will also assume all ongoing liabilities and obligations of ZEB, which will include a 2.5% royalty on all revenue generated from the Project (the "Royalty"). Two percent of the Royalty can be purchased for a one-time cash payment of US$3,000,000.

BRC is at arms-length from each of URU and ZEB, and ZEB is a wholly-owned subsidiary of URU.  Upon the completion of the Transaction, it is expected that ZEB will become a wholly owned subsidiary of BRC (the "Resulting Issuer"), and URU will become a "control person" of the Company.

Pursuant to the letter of intent, and in connection with the Transaction, the Company intends to complete a non-brokered private placement (the "Concurrent Financing") of subscription receipts (each, a "Receipt") at a price of CND 0.25 per Receipt to raise CND $2,000,000 before expenses.  Proceeds from the Concurrent Financing will be held in escrow pending completion of the Transaction.  Following completion of the Transaction, the Receipts will automatically be converted into post-Consolidation common shares of the Company.  Net proceeds of the Concurrent Financing will be used for the exploration and development of the Project, and for working capital and general corporate purposes.  All securities issued in connection with the Concurrent Financing will be subject to a four-month-and-one-day statutory hold period in accordance with applicable Canadian securities laws.

Completion of the Transaction is subject to a number of conditions including:

·    the completion of the Concurrent Financing of CND $2,000,000 by BRC;

·    the satisfactory completion of due diligence by the Company and BRC;

·    the negotiation and entering into of definitive agreements;

·    the completion of the Concurrent Financing by BRC;

·    receipt of all required shareholder, regulatory and third-party consents, including approval of the TSX-V and the shareholders of URU;

·    satisfaction of other customary closing conditions.

The Transaction and Concurrent Financing cannot close until the required approvals are obtained.  There can be no assurance that the Transaction and Concurrent Financing will be completed as proposed or at all.

In connection with the Transaction, BRC has commissioned a geological report on the Project.  Prior to completion of the Transaction, a copy of the geological report will be filed and posted on SEDAR.  Further information on the Transaction will be available and posted on SEDAR upon completion of a filing statement that will be prepared by BRC.

Trading in the common shares of BRC will remain halted pending further filings with the TSX-V.

Assuming that the Transaction is completed, URU will have an interest in 41,000,000 common shares of BRC, representing approximately 79.85% of the issued common share capital of BRC.

Shareholders should note that, should the Transaction proceed, the disposal of ZEB would be deemed to be a a fundamental change of change of business pursuant to Rule 15 of the AIM Rules for Companies. Accordingly, a circular will be published by the Company prior to the completion of the Transaction and shareholders of URU will be asked to consent to the disposal of ZEB at a meeting of shareholders. For the avoidance of doubt, URU is not expected to become an AIM Rule 15 company as a consequence of the Transaction.

URU intends to retain ownership of the common shares of BRC for the forseeable future and these shares will be subject to a hold period, further details of which will be provided when the Company publishes  a circular in connection with the Transaction.

There are no profits or losses attributable to ZEB, as it is a holding company for the Project. 

Information Concerning ZEB

ZEB is a wholly-owned subsidiary of URU, established under the laws of the Republic of South Africa.  ZEB owns a seventy-four percent interest in Umnex Minerals Limpopo (Pty) Ltd., which in turn holds an interest in Lesego Platinum Uitloop (Pty) Ltd. which controls the Project.  Aside from its interest in the Project, ZEB has no assets.

Management and Board of Directors

Upon completion of the Transaction, it is expected that all the directors and officers of BRC, other than Anton Drescher, will resign and the board of directors and management of BRC will be reconstituted to consist of nominees of URU. The following sets out the names and backgrounds of all persons who are expected to be appointed as officers and directors of the Resulting Issuer:

Wayne Isaacs, CEO and Director.  Mr. Isaacs has a thirty-year career on Bay Street specializing in the resource sector both as a corporate executive of resource companies and as an investment banker. This extensive experience has allowed him to successfully seek out and engage and acquire significant resource assets and financing to support exploration, development and mining activities for his operating and investee companies. Mr. Isaacs has been involved as principal in 30 listed companies and has served as a director and / or senior officer of over 35 listed companies. He was the President and Director of Forsys Metals Corp. from 2003 to 2007, a TSX listed company with uranium properties in Namibia, Africa which he managed from start up to in excess of $750 million in market capitalization raising over $70 million to advance its uranium property from the exploration stage to the production decision stage. Mr. Isaacs is currently a Director of AM Resources Corp. (TSX.V: AMR), a mining company engaged in the exploration of coal, hydrocarbons and gold mining sites located in Colombia. He is a graduate of the University of Western Ontario and has held numerous securities certifications and licenses.

Tom Panoulias, Director.  Mr. Panoulias is a capital markets professional with over fifteen years of experience.  He has previously worked at Echelon Wealth Partners, Fraser Mackenzie, and Dundee Capital Markets, raising over one billion dollars for issuers in the mining sector and advising senior management teams on numerous merger and acquisition transactions. Prior to entering capital markets, Mr. Panoulias held senior roles at Kinross Gold Corporation and TVX Gold Inc. in corporate development, responsible for managing various acquisition and divestiture activities. He currently is the Vice President of Corporate Development for Freeman Gold Corp. and a director of Bonavista Resources Corp.  Mr. Panoulias holds an Honours Bachelor of Commerce degree from the University of Toronto and is a member of the Canadian Institution of Mining and Metallurgy and the Toronto Society of Financial Analysts.

Anton Drescher, Director.  Mr. Drescher has been a Certified Public Accountant, Certified Management Accountant since 1981. Mr. Drescher is currently involved with several public companies including as: a director (since 1991) of International Tower Hill Mines Ltd., a public mining company listed on the TSX and the NYSE-MRT; a director (since 1996) and Chief Financial Officer (since 2012) of Xiana Mining Inc., a public mineral exploration company listed on the TSXV; a director (since 2007) and the Chief Financial Officer of Oculus VisionTech Inc., a public company involved in watermarking of film and data listed on the TSXV and the OTC Bulletin Board; a director (since 2014) of CENTR Brands Corp., a public company listed on the CSE.  Mr. Drescher is also the President (since 1979) of Westpoint Management Consultants Limited, a private company engaged in tax and accounting consulting for business reorganizations, and the President (since 1998) of Harbour Pacific Capital Corp., a private company involved in regulatory filings for businesses in Canada.

Greg McKenzie, Director.  Mr. McKenzie (JD, MBA) is a former senior investment banker with more than twenty years of experience in financing, M&A, financial advisory, valuation, and strategic advice to mid-cap companies. Mr. McKenzie has held positions with Morgan Stanley, CIBC World Markets and Haywood Securities, and has been involved in transactions valued in excess of $18 billion. In addition to his capital market experience Mr. McKenzie previously practiced corporate law with a leading Canadian securities and M&A law firm.  He is currently the President & CEO of Golden Tag Resources, a Mexican Silver Exploration and Development Company.

Jay Vieira, Director.  Mr Vieira is the Non-executive Chairman of URU and former Vice President, Corporate and Legal Affairs at Distinct Infrastructure Group Inc.  Previously, from 2006 to 2016, he was a partner with the law firm of Fogler, Rubinoff LLP, Toronto, Ontario, where he focussed on securities and corporate finance. Mr. Vieira is a member of the Canadian and Ontario bar associations and the Law Society of Upper Canada.  He was admitted to the Ontario bar in 1999 after obtaining his LL.B. from the University of Windsor Law School. Mr. Vieira also holds a B.A. (Hons.) in Humanities from McMaster University.

Martin Vydra, Strategic Advisor to the Board. Mr. Vydra President of Giga Metals joined following a thirty-one year career with Sherritt International Corporation, a leader in the mining, processing and refining of lateritic nickel and cobalt with operations in Canada, Cuba and Madagascar. Martin is widely recognized as an expert in nickel and cobalt extraction, processing and refining including the development and application of advanced technologies to maximize the recovery of valuable metals such as nickel and cobalt from a variety of feeds.  While at Sherritt, Martin's technical accomplishments spanned four continents and over 20 operations including postings in Australia where he was integrated in Murrin Murrin's refinery start up; Finland for the design of Harjavalta's nickel reduction circuit; and, in Chile where he oversaw the design, construction and commissioning of a major pressure oxidation operation. Most recently, Martin served as Sherritt's Senior Vice President, Commercial and Technologies, where he had oversight for the sales and marketing of nickel and cobalt, and marketing and commercialization of Sherritt's proprietary technologies.  Mr. Vydra also currently works for Conic Metals Corp in a strategic capacity.

Justin Cochrane, Advisor to the Board.  Mr. Cochrane, President and CEO of Conic Metals Corp., has 20 years of royalty and stream financing, M&A and corporate finance experience. Prior to Conic Metals, he served as President & COO of Cobalt 27 Capital Corp. and before that as Executive Vice President and Head of Corporate Development for Sandstorm Gold Ltd.  Mr. Cochrane's expertise is in the structuring, negotiation, execution and funding of royalty and stream financing contracts around the world, across dozens of projects, totaling over $2 billion.  Prior to Sandstorm, he spent nine years in investment banking and equity capital markets with National Bank Financial where he covered the resource, clean-tech and energy technology sectors. In addition, Mr. Cochrane is currently a board member of Nevada Copper Corp.

David Cross, Chief Financial Officer and Corporate Secretary.  Mr. Cross, a Certified Public Accountant, Certified Management Accountant, started his accounting career at a Chartered Accountant firm in 1997.  Currently he is a partner of Cross Davis & Company LLP, an accounting firm founded in 2010, which is focused on providing accounting and management services for publicly traded companies.  Mr. Cross also serves as the Chief Financial Officer and director of several publicly listed companies.

Sponsorship

The Transaction is subject to the sponsorship requirements of the TSX-V unless an exemption from those requirements is granted. BRC intends to apply for an exemption from the sponsorship requirements; however, there can be no assurance that an exemption will be obtained. If an exemption from the sponsorship requirements is not obtained, a sponsor will be identified at a later date. An agreement to act as sponsor in respect of the Transaction should not be construed as any assurance with respect to the merits of the Transaction or the likelihood of its completion.

Name Change

Upon completion of the Transaction, BRC intends to change its name to "ZEB Nickel Corp." or such other name as the BRC and URU may determine, and the parties expect that the TSX-V will assign a new trading symbol for the Resulting Issuer.

Further information about BRC

BRC is a capital pool company ("CPC") within the meaning of the policies of the TSX-V that has not commenced commercial operations and has no assets other than cash. The current directors and officers of BRC consists of Anton Drescher (Director, President, Chief Executive Officer and Corporate Secretary), Raphael Danon (Director), David Cross (Chief Financial Officer) and David Brett (Director).

BRC currently has 5,400,000 common shares issued and outstanding, as well as 200,000 incentive stock options and 200,000 broker warrants to acquire common shares, each exercisable at CND 0.10 per share. Following the Consolidation, BRC will have approximately 2,347,826 shares outstanding, and 86,957 incentive stock options and 86,957 broker warrants, each exercisable at CND 0.23 per share.

Following completion of the Transaction, BRC is expected to have 51,347,826 common shares in issue.

Upon successful completion of the proposed acquisition of ZEB, it is anticipated that BRC will be listed as a Tier 2 Mining issuer on the TSX-V and will be involved in the exploration and development of the Project.  The Transaction is intended to constitute BRC's "qualifying transaction" pursuant to Policy 2.4 - Capital Pool Companies of the TSX-V.

For further information please contact:

Completion of the Transaction is subject to a number of conditions, including but not limited to, TSX Venture Exchange acceptance. The Transaction cannot close until the required approvals are obtained, and the outstanding conditions satisfied. 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 filing statement to be prepared in connection with the Transaction, any information released or received with respect to the Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of BRC 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 policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

This news release may contain certain "Forward-Looking Statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities laws.  When or if used in this news release, the words "anticipate", "believe", "estimate", "expect", "target, "plan", "forecast", "may", "schedule" and similar words or expressions identify forward-looking statements or information.  These forward-looking statements or information may relate to proposed financing activity, regulatory or government requirements or approvals, the reliability of third-party information and other factors or information.  Such statements represent the Company's current views with respect to future events and are necessarily based upon a number of assumptions and estimates that, while considered reasonable by the Company, are inherently subject to significant business, economic, competitive, political and social risks, contingencies and uncertainties.  Many factors, both known and unknown, could cause 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. The Company does not intend, and does not assume any obligation, to update these forward-looking statements or information to reflect changes in assumptions or changes in circumstances or any other events affecting such statements and information other than as required by applicable laws, rules and regulations.

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement.

For further information, please contact:

URU Metals Limited

John Zorbas

(Chief Executive Officer)

 +1 416 504 3978

SP Angel Corporate Finance LLP

(Nominated Adviser and Broker)

Ewan Leggat      

+ 44 (0) 203 470 0470