Arehada Mining Limited

Arehada Mining Limited

July 29, 2016 11:33 ET

Arehada Announces Interim Cash Distribution to Shareholders of C$0.04 Per Common Share

TORONTO, ONTARIO--(Marketwired - July 29, 2016) - Arehada Mining Limited ("Arehada" or the "Company") announced that it has received the first installment payment of C$1.653 million (the "First Installment") from Arehada (Barbados) Holding Corporation ("Holding"), as partial payment of the purchase price pursuant to an investment purchase agreement dated as of March 31, 2015 (the "Investment Purchase Agreement") with Arehada (Barbados) Corporation, the Corporation's wholly-owned subsidiary ("ABC"), Holding, the Corporation's principal shareholder, and Yunnan Tiancheng Tourist Development Co., Ltd., the Corporation's indirect subsidiary ("Tiancheng") pursuant to which Holding purchased all of ABC's investment in Tiancheng and Holding agreed to pay the net purchase price for the Tiancheng Investment to the Corporation. The payments due from Holding under the Investment Purchase Agreement are made after deducting the amounts Holding paid for satisfying obligations of the Corporation and ABC in China. For further details of the Investment Purchase Agreement, please see the Corporation's information circular dated March 31, 2015 available at www.sedar.com with respect to the meeting of shareholders held on April 27, 2015 where shareholders of the Corporation approved the voluntary liquidation and dissolution of the Corporation (the "Dissolution") pursuant to section 237 of the Business Corporations Act (Ontario).

In connection with the Dissolution, the board of directors of the Corporation have resolved to satisfy or provide for certain of the outstanding obligations of the Corporation (for the aggregate amount of approximately C$0.258 million), and to make an interim distribution to its shareholders from the First Installment of an aggregate amount of C$1.25 million or $0.04 per common share, which will be paid on August 17, 2016 to shareholders of record on August 8, 2016 other than Holding

Record Date Payment Date Distribution per Share
August 8, 2016 August 17, 2016 C$0.04

Holding is the largest shareholder of the Corporation holding a total of 141,832,308 common shares. The distribution amount payable by the Corporation to Holding will be satisfied by setting off against the purchase price owing by Holding to ABC under the Investment Purchase Agreement.

The cash payment represents an interim distribution pursuant to the Dissolution. This interim distribution is designated as return of capital for purposes of the Income Tax Act (Canada).

Further to the first distribution, Arehada's only remaining assets will consist of cash in an aggregate amount of approximately $0.145 million, and balance of the purchase price payable by Holding under the Investment Purchase Agreement (after deducting the amount Holding paid to satisfy outstanding obligations of the Corporation and ABC in China, and after taking account of the estimated distributions to Holding).

Holding is in the process of arranging for further installment payments to be made to the Corporation under the Investment Purchase Agreement. When further instalment payments are received by the Corporation from Holding, directors of the corporation will make further distributions to the shareholders after providing for the Corporation's liabilities. At the same time, Arehada will complete the remaining corporate, administrative and tax processes to facilitate its dissolution and the final distribution of the remaining cash of Arehada prior to its dissolution.

The final distribution to shareholders, the cancellation of the shares of Arehada and the dissolution of Arehada will not occur until Arehada has received all payments from Holding under the Investment Purchase Agreement and until all necessary corporate, administrative and tax measures to dissolve Arehada are completed and until the settlement of any remaining contingencies that may arise in connection with the remaining liquidation and dissolution steps of Arehada. There is no certainty as to the timing or amount of such final distribution and dissolution.

Delisting from NEX and Cease Trade Orders

The Corporation reports that it was delisted from NEX board of the TSX Venture Exchange on October on October 14, 2014. Therefore the Corporation's shares are not listed on any stock exchange. Further, as the Corporation had failed to file its audited financial statements for 2010 by the required time, cease trade orders have been issued by each of the Ontario Securities Commission, the British Columbia Securities Commission and the Alberta Securities Commission, and are still in place as of today.

Forward Looking Information

The above contains forward looking information that is subject to a number of known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those anticipated in our forward looking statements. Generally, forward looking information can be identified by the use of forward looking terminology such as "plans", "expects", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might", or "will be taken", "occur", or "be achieved". Forward looking information in this press release relates to the management's expectation on the receipt of further installment payments from Holding, the amount of remaining liabilities of the Corporation; the timing and amount of distributions to shareholders; management's expectations on satisfaction of all liabilities, distribution of remaining assets to shareholders and completion of the dissolution. Although we believe the expectations reflected in our forward looking information are reasonable, results may vary, and we cannot guarantee future results, levels of activity, performance or achievements. Readers should not place undue reliance on forward looking information.

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