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Royal Road Minerals announces strategic investment from Barrick Gold Corporation and concurrent private placement financing

Press Release, 24th January 2018

January 24, 2018 – Toronto, Ontario: Royal Road Minerals Limited (TSXV:RYR) (“Royal Road Minerals” or the “Company”), a gold and copper focused mineral exploration and development company, is pleased to announce that it has entered into a subscription agreement (the “Subscription Agreement”) dated January 23, 2018 with Barrick Gold Corporation (“Barrick”) in connection with a proposed offering by way of private placement (the “Financing”) of ordinary shares (“OrdinaryShares”) in the capital of the Company.

Under the terms of the Subscription Agreement, Barrick has agreed to purchase from the Company an aggregate of 9,875,876 Ordinary Shares (the “Purchased Shares”) at a purchase price of C$0.16 per Ordinary Share (the “Issue Price”). On or before the closing of the issuance and sale of the Purchased Shares, the Company also intends to complete the Financing, pursuant to which it plans to issue an additional 21,374,124 Ordinary Shares (the “Offering Shares”) at the Issue Price, for aggregate gross proceeds from the issuance of the Purchased Shares and the Offering Shares of C$5,000,000.

The Purchased Shares, together with the 11,104,400 Ordinary Shares owned by Barrick as of the date of this news release, are expected represent 12.5% of the issued and outstanding Ordinary Shares upon completion of the Financing and the private placement of Purchased Shares (assuming that the number of issued and outstanding Ordinary Shares as at the date hereof remains unchanged). Closing of the transactions is expected to occur on or before February 9, 2018, and is subject to certain conditions, including approval of the TSX Venture Exchange and the completion of the Financing on the terms described herein.

In connection with the Subscription Agreement, the Company and Barrick entered into an investor rights agreement, pursuant to which Barrick, provided that it owns at least a 10% interest in Royal Road Minerals (calculated in accordance with the investor rights agreement), has the right to participate in equity financings by Royal Road Minerals in order to maintain its pro rata ownership in Royal Road Minerals at the time of any such financing or acquire up to a 12.5% ownership interest in Royal Road Minerals (in each case after giving effect to any such financing). The agreement also provides that, in the event that Ordinary Shares are issued by the Company as a result of the exercise of currently outstanding convertible securities of the Company, Barrick has the right to subscribe for additional Ordinary Shares to maintain its pro rata ownership in Royal Road Minerals at the time of any such issuance or acquire up to a 12.5% ownership interest in Royal Road Minerals (in each case after giving effect to any such issuance).
 
Dr. Tim Coughlin, President and Chief Executive Officer of Royal Road Minerals, commented “We were pleased when Barrick made its initial investment in the Company and are now even more pleased that Barrick will participate in our current financing as a strategic shareholder. Barrick is a world-class mining company with a vision for partnering with host governments and communities to transform natural resources into sustainable benefits and mutual prosperity, underpinned by relationships built on transparency and respect. Barrick’s additional investment represents a strong endorsement of our efforts in Colombia and reflects the exploration and development potential of our company.”
 
The proceeds from the private placement to Barrick and the Financing are expected to be used for exploration and development at the Company’s Colombian and Nicaraguan properties and for general corporate and working capital purposes. All Ordinary Shares issued in the transactions will be subject to a statutory four month hold period. Closing of the Financing will be subject to certain conditions, including approval of the TSX Venture Exchange.
 
The securities to be issued under the Subscription Agreement and in the Financing, have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), or any state securities laws, and accordingly, may not be offered or sold within the United States except in compliance with the registration requirements of the U.S. Securities Act and applicable state securities requirements or pursuant to exemptions therefrom. This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the Company’s securities in the United States.