RHC Capital Corporation
NEX BOARD : RHC.H
TSX VENTURE : RHC.H

June 21, 2017 18:44 ET

RHC Capital Corporation Announces Amalgamation Agreement

VAUGHAN, ONTARIO--(Marketwired - June 21, 2017) -

NOT FOR DISTRIBUTION IN THE UNITED STATES OR TO U.S. NEWSWIRE SERVICES.

RHC Capital Corp. ("RHC"), listed on NEX (NEX:RHC.H), is pleased to announce, further to its news release dated June 7, 2017, that it has entered into a amalgamation agreement, dated June 16, 2017 (the "Amalgamation Agreement"), with Vela Resources Corp. ("Vela").

The amalgamation will proceed as an amalgamation of Vela with a wholly-owned subsidiary of RHC ("Subco") incorporated specifically for the transaction (the "Amalgamation"). Vela and Subco will amalgamate as one corporation, being Amalco, under the name "Vela Resources Corp." and, among other things:

  1. each issued and outstanding common share of Vela ("Vela Share(s)") (other than any Vela dissenting shareholders) will be exchanged for approximately 3.5271 common shares of RHC ("RHC Shares"), following which all such Vela Shares shall be cancelled;

  2. each issued and outstanding Vela Share held by a Vela dissenting shareholder will be cancelled and the Vela dissenting shareholder will be entitled to be paid the fair value of such Vela Shares by Amalco in accordance with The Business Corporations Act (Saskatchewan);

  3. each issued and outstanding Subco common share will be exchanged for one Amalco common share following which all such Subco common shares shall be cancelled;

  4. it is anticipated that each outstanding Vela stock option will be exercised at its face value immediately prior to the Amalgamation, and any Vela stock option not exercised prior to the Amalgamation shall be cancelled; and

  5. Amalco will issue to RHC one fully paid and non-assessable Amalco common share for each RHC Share issued.

There are currently 19,775,100 Vela Shares, 1,550,000 Vela stock options and 1,140,000 Vela warrants outstanding. RHC will issue 75,216,186 RHC Shares in exchange for all of the issued and outstanding Vela Shares at the time of Amalgamation, representing approximately 50% of the issued and outstanding RHC Shares calculated on an undiluted basis. The 1,140,000 Vela warrants currently outstanding may be converted to RHC broker warrants at the same conversion ratio as Vela Shares at an exercise price of not less than $0.05 per RHC Share, unless such warrants are exercised prior to the completion of the transaction, in which case the share conversion ratio will be adjusted slightly to reflect the total number of Vela Shares being converted for the 75,216,186 RHC Shares being issued.

Completion of the Amalgamation is subject to the final approval of the TSX Venture Exchange, which is currently reviewing the transaction as a reactivation of RHC for listing as a Tier 2 oil and gas issuer. Trading in the shares of RHC will remain halted.

About RHC Capital Corporation

RHC Capital Corporation is currently listed on the NEX board under the symbol RHC.H. There are currently 75,216,186 common shares issued and outstanding.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term that is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release.

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