NXA Inc. Signs Letter of Intent for Proposed Business Combination With Ontario Graphite Ltd.

TORONTO, ONTARIO--(Marketwired - April 17, 2014) - NXA INC. ("NXA" or the "Company") (TSX VENTURE:NXI.H) is pleased to announce that it has entered into a letter of intent (the "LOI") dated April 16, 2014 to complete a business combination with Ontario Graphite Ltd. ("OGL"). OGL is a privately owned Canadian mining company incorporated under the Business Corporations Act (Ontario) and committed to the responsible re-commissioning and operation of the Kearney Mine in Kearney, Ontario, one of the largest confirmed graphite mineral resource projects in North America and among the largest individual deposits in the world.

It is currently contemplated that NXA, OGL and OGL's parent company, Ontario Graphite, Ltd., a corporation existing under the laws of Cayman Islands ("OGL Parent"), will complete a business combination by way of share exchange, merger, amalgamation, arrangement or other similar form of transaction (the "Proposed Transaction"), which will result in OGL or OGL Parent amalgamating with or becoming a wholly-owned subsidiary of NXA (or such other entity that may be created for the purposes of completing the Proposed Transaction), or otherwise combining its corporate existence with a wholly-owned subsidiary of NXA. As part of the Proposed Transaction, it is intended that common shares in the capital of NXA ("Common Shares") will be issued to holders of securities of OGL Parent at an exchange ratio based on the relative values of NXA and OGL Parent, which will be determined.

Upon completion of the Proposed Transaction, it is proposed that the Company will become a Mining Issuer listed on Tier 2 of the TSX Venture Exchange (the "Exchange") and is intended to be renamed "Ontario Graphite (Canada) Limited" (the "Resulting Issuer"). The Resulting Issuer will carry on the business of OGL as currently constituted.

Approval of the LOI and the terms of the Proposed Transaction has been received from the board of directors of the Company. Completion of the Proposed Transaction is subject to certain conditions, including the receipt of the Exchange and regulatory approvals, disinterested approval of the shareholders of the Company and the shareholders of OGL Parent, completion of satisfactory due diligence by the Company and OGL, completion of definitive legal documentation and completion of a private placement (the "Private Placement") by OGL or OGL Parent. The Private Placement will involve an offering of subscription receipts, which subscription receipts are intended to be automatically exercisable for securities of OGL or OGL Parent, as applicable, (the "OGL Securities") upon satisfactory completion or waiver of all conditions precedent to the Proposed Transaction. Each OGL Security is intended to be exchanged for securities of NXA pursuant to, and upon completion of, the Proposed Transaction. The net proceeds of the Private Placement are intended to be used to further the re-commissioning process of the Kearney Mine.

It is expected that, in anticipation of the Proposed Transaction, the Company will issue Common Shares in settlement of certain existing debts of the Company, subject to approval of the Exchange.

Trading of the Common Shares of the Company has been halted and the Common Shares will remain halted in accordance with Exchange policies until all required documentation with respect to the Proposed Transaction has been received and the Exchange is otherwise satisfied that the halt should be lifted.

A press release with further particulars relating to the Proposed Transaction will follow in accordance with the policies of the Exchange.

Completion of the Proposed Transaction is subject to a number of conditions, including Exchange acceptance and disinterested shareholder approval. The Proposed Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Proposed Transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the management information circular to be prepared in connection with the Proposed Transaction, any information released or received with respect to the Proposed Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of NXA should be considered highly speculative.

The 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 Exchange nor its Regulation Services Provider (as that term is defined in policies of the Exchange) accepts responsibility for the adequacy or accuracy of this release.

The statements used in this press release may contain forward-looking statements, and are based on the opinions and estimates of management, or on opinions and estimates provided to, and accepted by, management. These opinions and estimates are used by management, and speak only as of the date of this press release. Forward-looking statements in this press release include, but are not limited to, the closing of the Proposed Transaction and the anticipated benefits from the Proposed Transaction. Forward-looking statements involve significant known and unknown risks, uncertainties and assumptions, including with respect to the closing of the Proposed Transaction, the timing and receipt of all applicable regulatory approvals and third party consents, the anticipated benefits from the Proposed Transaction and the satisfaction of other conditions to the completion of the Proposed Transaction. Forward-looking statements are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ, possibly significantly. Although the Company believes that its expectations reflected in these forward-looking statements are reasonable, such statements involve risks and uncertainties and no assurance can be given that actual events or results will be consistent with these forward-looking statements. Except as required by applicable law, the Company does not undertake, and specifically disclaims, any obligation to update or revise any forward-looking information, whether as a result of new information, future developments or otherwise. Readers are therefore cautioned not to place undue reliance on any forward-looking statements.