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

June 07, 2017 16:41 ET

RHC Capital Corporation Announces Letter Agreement

VAUGHAN, ONTARIO--(Marketwired - June 7, 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 that it has entered into a letter agreement, dated May 24, 2017, regarding a business combination with Vela Resources Corp. ("Vela"), a Saskatchewan based private company focused on the exploration for and development of helium resources in Southern Saskatchewan.

The parties have agreed, subject to approval of the TSX Venture Exchange, to a business combination which will see the resulting issuer held approximately 50% by former RHC shareholders and approximately 50% by former Vela shareholders and the resulting issuer will proceed with the development of the Vela assets as its principal business (the "Transaction"). Subject to the results of the investigations to be conducted pursuant to the terms of the letter agreement, RHC and Vela will use their reasonable commercial efforts to negotiate and sign a definitive agreement within 10 days of completion of the due diligence period, or such later date as the parties may mutually agree, with a target closing date for the Transaction of July 1, 2017.

They have agreed that, in conjunction with the completion of the Transaction, two of the current four directors of RHC will resign in favour of two appointees of Vela. It is expected that new board of the resulting issuer will be comprised of four directors, two nominees from Vela and two nominees from RHC. The new board formed on closing of the Transaction shall appoint Scott Newman (a director of Vela) as Chief Executive Officer of the resulting issuer and Andrew Davidson (President and a director of Vela) as Chief Financial Officer of the resulting issuer.

Mr. Newman was the President and founding partner of Axiom Exploration Ltd., a geological and engineering consulting company based in Saskatchewan. He is a graduate of the University of Saskatchewan (B.Sc. Geology). His technical and management experience within the sector, Saskatchewan in particular, brings a strong operational background to the team. Mr. Newman has been involved as an executive or director to a number of private and public oil and gas exploration companies.

Mr. Davidson is a graduate of the University of Calgary (BComm). He is a Chartered Professional Accountant in both Saskatchewan and Alberta. Mr. Davidson has extensive experience in managing junior natural resource exploration companies, with a specific focus on the structuring and financing of early stage projects. He is involved as an officer or director of a number of public resources exploration companies currently.

Commencing operations in 2016, Vela has focused its efforts on the strategic acquisition of significant acreage of helium exploration and permits and helium leases over land that hosts some of the highest concentrations of helium known in Saskatchewan. At present, Vela holds 99,047 acres under helium leases and 132,826 acres under 21-year helium permits, with an additional 69,120 of permit applications under review with the Saskatchewan Ministry of the Economy. This land holding position makes Vela one of the largest helium rights holders in North America. Vela's land acquisition strategy focused on identifying areas in the Province of Saskatchewan with specific geological criteria which indicated a high probability of helium in economic quantities. As such, the company has a high level of confidence in the ability to complete successful initial drilling operations. The current operational timeline calls for Vela to commence drilling operations in the fall of 2017.

RHC and Vela intend to proceed with completion of the Transaction as soon as possible as a reactivation of RHC as a listed issuer on the TSX Venture Exchange. As a result, certain matters related to the Transaction which require shareholder approval will be presented to shareholders for their approval as soon as reasonably possible following completion of the Transaction. Such matters include, but are not limited to: (i) a change of the name of the resulting issuer to a name proposed by Vela and accepted by regulatory authorities, (ii) election of an additional director nominee of Vela for a total of five directors of the Resulting Issuer, and (iii) continuance of RHC from Ontario to Saskatchewan.

Vela has prepared a draft technical report on its property interests which has been submitted to the TSX Venture Exchange for review. It is expected that RHC will provide a further comprehensive news release with information from that technical report prior to final approval of the Transaction by the TSX Venture Exchange. RHC anticipates a further news release with additional information regarding the technical and financial aspects of Vela's business which will be the business of the resulting 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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