Pangaea Holdings Limited

November 18, 2016 23:00 ET

Pangaea Holdings Limited: Early Warning Report Filed Pursuant to National Instrument 62-103

TORONTO, ONTARIO--(Marketwired - Nov. 18, 2016) - Besra Gold Inc. ("Besra" or the "Company"): This press release is being disseminated as required by National Instrument 62-103 The Early Warning System and Related Take Over Bids and Insider Reporting Issues in connection with the acquisition of securities of the Company by Pangaea Holdings Limited (the "Acquiror").

The Acquiror announces that, on November 17, 2016, pursuant to a securities purchase agreement between the Acquiror and the Company of the same date, Besra issued to the Acquiror: (i) a 5% secured convertible note in the principal amount of CDN$10,000,000 (the "Note"), (ii) 1,412,806,900 common shares of the Company subject to an escrow agreement as more fully described below (the "Escrowed Shares"), and (iii) warrants to acquire up to 333,333,333 common shares of the Company (the "Warrants", together with the Note and the Escrowed Shares, the "Securities") at an exercise price per common share of CDN$0.02 for a term of five years from the date of issuance, for gross proceeds to the Company of CDN$10,000,000.

The Note is convertible for up to 1,000,000,000 common shares and warrants to acquire up to 333,333,333 common shares at an exercise price per common share of CDN$0.02 for a term of five years from the date of issuance.

Prior to the transaction, the Acquiror held no securities of the Company. After giving effect to the transaction, on a fully converted basis (giving effect to the Escrowed Shares buy-back discussed below), the common shares underlying the Warrants, the Note (including the warrants issuable on conversion thereof), total an aggregate of 1,666,666,666 common shares representing approximately 54.2% of the issued and outstanding common shares of the Company.

On a non-converted basis, the Acquiror owns or has control or direction over 1,412,806,900 common shares representing approximately 50.1% of the issued and outstanding common shares of the Company, all of which are Escrowed Shares.

In order to vest the Acquiror with voting control of the Company pending conversion of the Note, the Acquiror was issued the Escrowed Shares representing 50.1% of the voting rights of the Company's issued and outstanding common shares. Such Escrowed Shares have been deposited with an escrow agent pursuant to a common share escrow agreement which provides the Acquiror with the voting rights in respect of such Escrowed Shares but not economic or other rights in respect thereof, which rights are held by the Company.

Further, as common shares are issued to the Acquiror, whether by conversion of the Note or otherwise, Escrowed Shares will be redeemed for a nominal amount such that the Escrowed Shares will not cause the Acquiror's voting rights to exceed 50.1% of the voting rights of the Company's issued and outstanding common shares. All remaining Escrowed Shares will be redeemed by the Company for a nominal sum upon conversion of the Note.

The Securities were acquired on a private placement basis in connection with the Company's satisfaction of certain conditions set out in the Company's amended proposal pursuant to Part III of the Bankruptcy and Insolvency Act (Canada) dated May 17, 2016 (the "Proposal"). As a condition of the Proposal, the Company was required to secure exit financing of not less than CDN$10,000,000. The Acquiror's investment in the Securities was made with a view to enabling the Company to satisfy this condition of the Proposal.

The Securities were acquired for investment purposes and the Acquiror may, depending on market and other conditions, increase or change its beneficial ownership over the common shares or other securities of the Company through market transactions, private agreements, treasury issuances, exercise of convertible securities or otherwise.

As a condition to the investment, the Company has appointed Jocelyn Bennett, nominee of the Acquiror, to its Board of Directors, effective November 17, 2016.

Pursuant to a placing commission letter between the Company and the Acquiror, the Company paid to the Acquiror CDN$500,000 in respect of the transactions contemplated by the securities purchase agreement and, upon the revocation of the cease trade orders currently in place against Besra in British Columbia, Alberta, Ontario and Quebec, (the "CTOs") the Company will issue to the Acquiror 900,000 common shares and Warrants to purchase up to 166,667 common shares on the same terms as described above. There is no guarantee that the CTOs will be revoked or that the additional common shares and Warrants will be issued to the Acquiror or any assignee of the Acquiror.

In addition, the Acquiror has also agreed to, on or prior to the thirtieth business day following full revocation of the CTOs, effect a further investment in the Company of CDN$2,000,000 in the form of an additional convertible note, escrowed shares and warrants to purchase common shares.

A copy of the Early Warning Report filed under applicable securities laws is available under the Company's profile on SEDAR (www.sedar.com). A copy of such report may also be obtained by contacting DS Lawyers Canada LLP, the Acquiror's Canadian legal counsel, at kwells@dsavocats.ca.

The name and address of the "Acquiror" filing the report is:
Pangaea Holdings Limited
Attn: Jocelyn Bennett
Level 7(A), Main Office Tower
Financial Services Tower
87000 Labuan FT, Malaysia

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