Casa Mining Revised Transaction Terms

5 May 2021

Arc Minerals Ltd

("Arc", "Arc Minerals" or the "Company")

Casa Mining Revised Transaction Terms

Further to the announcement made by Arc Minerals on 9 April 2021 to extend the US$5m loan note to 16 July 2021, Arc wishes to inform shareholders that it has been notified by Golden Square Equity Partners Limited ("Golden Square") that Golden Square has been approached by a third party interested buyer, Golden Mining Limited ("Golden Mining"), to acquire the Casa interests (the "Transaction"), which requires the consent of Arc Minerals. Concurrent to closing of the Transaction, Golden Mining will be a subsidiary of TSX-V-listed Rackla Metals Inc. (TSX-V: RAK) ("Rackla"), an acquisitive mineral exploration company.

Arc Minerals has reviewed the Transaction, which it believes is more attractive than the previous transaction that was agreed with Golden Square and has given its conditional approval of the Transaction, which is subject to customary conditions to closing, including approval by the TSX Venture Exchange and completion by Rackla of a minimum financing of C$5,000,000. Shareholders should note that, until the conditions to closing are satisfied, there is no certainty that the Transaction will be completed or that Arc will receive any consideration from the Transaction.

The revised terms of the Transaction will result in the following:

a)    Arc to receive US$750k cash from Golden Mining on closing of the Transaction;

b)    Arc to receive US$750k cash from Golden Mining within 90 days of closing as a post-closing payment (guaranteed by Rackla);

c)    As a condition to closing, Arc will receive a US$3.5m loan note in favour of Arc, payable by Golden Square on or before December 31, 2021. As security, Arc shall receive 3.5 million Common Shares of Black Rock Petroleum Co, an oil and gas exploration-stage company registered in Nevada and which is listed on the OTC Market in the United States;

d)    Within 24 months of closing, Golden Mining shall complete an independent resource evaluation in accordance with National Instrument 43-101 administered by the Canadian Securities Administrators (the "Technical Report") in respect of the Akyanga Gold Project, a key asset of Casa in the Democratic Republic of Congo. Golden Mining agrees to pay Arc within 60 days of completion of the Technical Report, payment in the amount of US$1/ounce of identified reserves of between 1m and 5m ounces;

e)    Arc to receive US$1m in cash if Golden Mining produces 30,000 ounces of gold prior to the date that is 5 years from the closing date; and

f)     When any portion of Casa comes into commercial production a net smelter royalty shall be calculated on a quarterly basis at 1% payable to Arc up to a maximum aggregate amount of US$25m. 

As a result of the new transaction, Arc and Golden Square agree to release and discharge the other from all claims / demands in respect of the original transaction with Golden Square subject to closing of the Transaction.

Nick von Schirnding, Executive Chairman of Arc said: "We believe that the Transaction represents a good  deal for Arc's shareholders in that it provides a series of milestone payments up to $10m payable to Arc potentially much earlier than the previous royalty agreement that was in place as well as the $5m up-front payments being secured by listed securities. Lastly, the royalty agreement ensures that Arc benefits from any future commercial production."

Market Abuse Regulation (MAR) Disclosure

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with the Company's obligations under Article 17 of MAR.

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