Rae-Wallace Mining Company
OTC PINK : RAEW

Rae-Wallace Mining Company

November 02, 2015 16:32 ET

Rae-Wallace Sells Certain Mining Claims in Exchange for 0.5% NSR and Terminates Option Agreement Over Other Properties

TORONTO, ONTARIO--(Marketwired - Nov. 2, 2015) -

NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES

Rae-Wallace Mining Company ("Rae-Wallace" or the "Company") (OTC PINK:RAEW) announces that it has entered into a termination agreement (the "Termination Agreement") with Pilot Gold Inc. ("Pilot") providing for the full termination of the property option agreement entered into with Pilot dated July 22, 2010 (the "Property Option"), and Pilot's option to acquire additional shares and convertible securities of the Company (the "Pilot Option") as contemplated by the original termination agreement entered into between Pilot and the Company on July 19, 2012 (the "Original Termination Agreement") (see news release of the Company filed on July 19, 2012).

Pursuant to the terms of the Termination Agreement, in consideration for the full termination of the Pilot Option, the Property Option, and the Original Termination Agreement, and the cancellation of 1,000,000 share purchase warrants of the Company ("Warrants") held by Pilot, the Company agrees to issue to Pilot 1,552,900 ordinary shares in the capital of the Company (the "Share Issuance"). For greater certainty, following the Share Issuance, Pilot will cease to have any rights to any securities of the Company and the Company will be fully released from its obligations to issue any further shares or additional Warrants to Pilot.

The ordinary shares issued to Pilot will be subject to a four month hold period from the date of issuance.

Following the issuance of the above noted shares, Pilot will own an aggregate of 5,538,000 ordinary shares, representing approximately 19.98% of the issued and outstanding ordinary shares of the Company.

Pilot has acquired the ordinary shares for investment purposes and may, depending on market and other conditions, increase or decrease his beneficial ownership, control or direction over the ordinary shares, or other securities of the Company, through market transactions, private agreements, treasury issuances, exercise of convertible securities or otherwise. For further details relating to the acquisition, please see the early warning report, a copy which is available on SEDAR.

The issuance of ordinary shares to Pilot constituted a related party transaction within the meaning of TSX Venture Exchange Policy 5.9 and Multilateral Instrument 61-101 ("MI 61-101") as insiders of the Company acquired an aggregate of 1,552,900 ordinary shares. The Company is relying on the exemptions from the valuation and minority shareholder approval requirements of MI 61-101 contained in sections 5.5(a) and 5.7(1)(b) of MI 61-101, as the fair market value of the ordinary shares issued to insiders does not exceed 25% of the market capitalization of the Company, as determined in accordance with MI 61-101. The Company did not file a material change report in respect of the related party transaction at least 21 days before the closing of the transaction, which the Company deems reasonable in the circumstances so as to be able to avail itself of potential financing opportunities and complete the transaction in an expeditious manner.

In addition, the Company would like to announce that it has recently entered into an agreement with Nevada Eagle LLC ("Nevada Eagle") whereby the Company has sold its 100% interest in certain un-patented mining claims located in White Pine County, State of Nevada in exchange for a 0.5% net smelter return royalty ("NSR") on potential production from the mining claims. Pursuant to the terms of the purchase and sale agreement Nevada Eagle has the one time option, two months following the completion of a feasibility study, to buy back the NSR for a price of USD$500,000.

About Rae-Wallace

Rae-Wallace is a mineral exploration company, existing under the laws of the Cayman Islands, that plans to explore and develop properties to the mineral production stage. Rae-Wallace stock currently trades on the OTC market under the symbol "RAEW".

Neither the TSX Venture Exchange 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.

Statements in this press release regarding the Corporation's business which are not historical facts are "forward-looking statements" that involve risks and uncertainties, such as estimates and statements that describe the Corporation's future plans, objectives or goals, including words to the effect that the Corporation or management expects a stated condition or result to occur. Since forward-looking statements address future events and conditions, by their very nature, they involve inherent risks and uncertainties. Actual results in each case could differ materially from those currently anticipated in such statements.

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