Odyssey Resources Limited
TSX VENTURE : ODX.H
NEX BOARD : ODX

Odyssey Resources Limited

September 28, 2015 09:00 ET

Odyssey Resources Enters Into a Non-Binding Letter of Intent to Acquire a Gold Tailings Project in Peru by Way of a Reverse Takeover Transaction and Plans to Complete a US$7.5 Million Financing

LONGUEUIL, QUÉBEC--(Marketwired - Sept. 28, 2015) -

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Odyssey Resources Limited ("Odyssey" or the "Company") (TSX VENTURE:ODX.H) is pleased to report that the Company has entered into a non-binding letter of intent dated September 25, 2015 with Green Mountain Inc ("Green Mountain"), an arms' length private company, pursuant to which Odyssey would acquire Green Mountain and its interest in the Ishihuinca Gold Tailings Project, located in Southern Peru (the "Ishihuinca Project").

The transaction consists of the acquisition by Odyssey of all the issued and outstanding equity securities of Green Mountain for which the shareholders of Green Mountain would receive, in exchange for each one share of Green Mountain, ten (10) common shares of Odyssey (the "Proposed Transaction"). The structure of the Proposed Transaction will be determined by Odyssey and Green Mountain following a review of all relevant tax, corporate and securities law considerations. The Proposed Transaction will constitute a reverse take-over of Odyssey under the policies of the TSX Venture Exchange ("TSX-V").

The Proposed Transaction is subject to Odyssey completing a financing (the "Financing"), raising a minimum of US$7.5 million on terms and conditions to be mutually agreed by both parties. Odyssey will issue a press release once further details regarding the Financing have been determined.

The Proposed Transaction is also subject to the parties satisfying various conditions including completion of due diligence, execution of a definitive agreement, Odyssey having received a title opinion and a National Instrument 43-101 technical report in respect of the Ishihuinca Project, and receipt of all required regulatory, stock exchange and shareholders approvals and consents.

Green Mountain has agreed to deal exclusively with Odyssey in respect of the Transaction until the earliest of (i) the date Odyssey indicates that it does not want to proceed following its due diligence, (ii) the entering into of a definitive agreement, and (iii) November 14, 2015. This provision of the letter of intent is binding.

Following completion of the Proposed Transaction and Financing, Odyssey would complete a share consolidation on a ten pre-consolidation for one post-consolidation basis. It is anticipated that the board of directors of Odyssey will comprise seven directors including at least four of the current five board members, with James Crombie remaining President and CEO. Christopher Clark and Nicholas Green from Green Mountain would join the board and be appointed as Chairman and COO respectively. Odyssey will issue a further press release when the composition of the board and management team of Odyssey post-transaction is determined.

Sponsorship of a reverse take-over is required by the TSX-V unless an exemption is granted in accordance with TSX-V policies. Odyssey intends to apply for an exemption from the sponsorship requirements.

The Ishihuinca Gold Tailings Project

The Ishihuinca Project is located in the Province of Caraveli, Department of Arequipa, Peru, approximately 780 kilometers by road southeast of Lima. The project is accessible via the Pan American Highway to within 80km of the project, and via a paved road to the mine site. Adequate water is available at the facility, and the Peruvian National power grid runs to within one kilometre of the site.

The Ishihuinca Project consists of a gold processing facility situated on a 300 hectare processing lease, tailings from the previous mining operations, and nearby mining concessions covering 1061 hectares. The Ishihuinca mine and processing plant operated from 1979 to 2012 through a subsidiary of the Buenaventura Mining Company. Originally the processing facility was a CIL plant treating high grade ore from the nearby Ishihuinca mine. A flotation plant, gravimetric separation plant, and Merrill Crowe circuit were subsequently added. Operations were suspended in July 2012. In June 2013, the Ishihuinca Project was sold to Compania Minera Corire S.A.C., a private Peruvian company ("Corire"). In 2014, LAI Corp S.A.C., a wholly owned Peruvian subsidiary of Green Mountain, concluded an agreement to purchase all the shares of Corire for US$3.13 million (US$280,000 paid to date) plus the assumption of the responsibility for Corire's residual debt to Buenaventura of US$1.75 million (plus interest). Buenaventura has accepted an offer from LAI Corp to settle Corire's residual debt for US$1 million. Upon completion of the Proposed Transaction, Odyssey will assume the obligations of LAI Corp, complete the purchase payments to the Corire shareholders and pay the outstanding US$1 million to Buenaventura.

Several investigations of the tailings since 2008 have been conducted in order to test the feasibility of reprocessing these tailings for gold and copper recovery. A number of resource and metallurgical studies have been conducted by Buenaventura and Green Mountain on the tailings from the previous operation. From these studies, two distinct areas of tailings have been identified: the CIL tailings and the Flotation tailings. Approximately 372,000 tonnes of high grade CIL tailings grading better than 4g/t Au have been identified in the historical resources, as well as 877,000 tonnes of Flotation tailings grading 1.86 g/t Au. Grade and tonnage estimates are considered historical since they are derived from investigations by Buenaventura in 2008 that included a 139 drill hole program and measurements of dry bulk density of both types of tailings. In 2014 these historical estimates were corroborated through a program of check sampling by Steven Park, C.P.G and a Qualified Person as defined by NI 43-101, and stated as Inferred Mineral Resources in an internal technical report prepared for Green Mountain. Mr. Park believes that the historical data and estimates are relevant and reliable and that the resource estimate as stated in the internal report may be elevated to a higher Mineral Resource level of confidence (i.e., Indicated) by additional check sampling programs such as twinning 12 to 15 of the Buenaventura drill holes. The historical estimate and results of the metallurgical studies will be summarised in a NI 43-101 report to be provided by Odyssey as part of this Transaction.

Based on these studies, Odyssey and Green Mountain believe that extraction and reprocessing of the Ishihuinca tailings could be done with relatively low capital cost investment to upgrade the processing facilities and commence within a few months of the closing of the Transaction. Most permits for the processing facility are in place, with a new tailings facility being the only major permit to be obtained.

The resources reported herein are provided as historical data only. A qualified person has not done sufficient work to classify the historical estimate as current mineral resources or mineral reserves and Odyssey is not treating the historical estimate as current mineral resources or mineral reserves.

Financing

As a condition of the transaction, Odyssey has agreed to raise a minimum of U$7.5 million to finance the acquisition and development of the Ishihuinca project. The Company has initiated discussions with a number of financing groups with a view to raising the necessary financing. Options under consideration include equity, convertible debt, and streaming finance.

Comment

Commenting on the Proposed Transaction, James Crombie, CEO of Odyssey said, "the Ishihuinca Project has the potential to provide cash flow in the near term. We believe the project to be low risk, with a low capital requirement, and low costs of production. In these difficult market conditions, these factors should make the project financeable. The prospect of cash flow in the short term will give Odyssey the chance to grow in the medium term as other opportunities present themselves".

Qualified Person

Steven Park, C.P.G. (AIPG) is the Qualified Person under NI 43-101 who has reviewed the technical disclosure with respect to the Ishihuinca Gold Project contained in this press release. Mr. Park is an independent consultant who has been retained by Odyssey to prepare a NI 43-101 technical report on the Ishihuinca Project. Mr. Park is also independent of Green Mountain.

About Green Mountain

Green Mountain Inc is a Cayman Island domiciled private company controlled by Mr Nicholas Green and Mr Christopher Clark, who together control 46% of the issued stock in Green Mountain. Mr Green is a resident of the Cayman Islands, and Mr Clark is a resident of Uruguay. Green Mountain has 23,969,948 common shares issued and outstanding.

About Odyssey Resources Limited

Odyssey is a Canadian-based exploration company whose focus is the acquisition, exploration and development of mineral resource properties. At the present time, the Company does not own any exploration property and is not carrying out any exploration programs. The Company has 36,231,486 common shares issued and outstanding. At June 30, 2015, the Company had working capital of approximately $0.7 million. Odyssey's common shares are listed on the NEX board of the TSX-V and trade under the symbol ODX.H.

Additional information about the Company is available on the Company's website (www.odysseyresources.com) and on SEDAR at www.sedar.ca.

Cautionary Statement

This press release contains forward-looking information. In particular, this press release contains statements concerning the prospective Transaction of the Company and the potential of the Ishihuinca Project. The information about the Ishihuinca Project contained in the press release has not been independently verified by the Company. Although the Company believes in light of the experience of its officers and directors, current conditions and expected future developments and other factors that have been considered appropriate that the expectations reflected in this forward-looking information are reasonable, undue reliance should not be placed on them because the Company can give no assurance that they will prove to be correct. Forward-looking information is subject to known and unknown risks and uncertainties, and depends on assumptions (including, but not limited to, assumptions about the potential of the Ishihuinca Project) and other factors, all of which may cause actual results or events to differ materially from those anticipated in such forward-looking information. The terms and conditions of the prospective Transaction may change based on the Company's due diligence on the proposed Transaction, the entering into a binding agreement for the Transaction, the success of the Financing, regulatory and third party comments, consents and approvals and the parties' ability to satisfy the conditions of the Transaction in the required timeframes. The forward-looking statements contained in this press release are made as of the date hereof and the Company undertakes no obligations to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

Completion of the Transaction, the Financing and the share consolidation are subject to a number of conditions, including but not limited to, TSX-V acceptance and shareholder approval or consent in respect of the Transaction. The Transaction cannot close until the required approvals are obtained. There can be no assurance that the Transaction, the Financing or the share consolidation will be completed as proposed or at all.

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

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