CHC Student Housing Enters into Definitive Agreement for Reverse Take-over Transaction; Announces Board and Management Changes

Toronto, Ontario--(Newsfile Corp. - December 8, 2020) - CHC Student Housing Corp. (TSXV: CHC.H) ("CHC") wishes to announce it has entered into a definitive share purchase agreement dated December 4, 2020 (the "Definitive Agreement") with 2294253 Alberta Ltd. ("TargetCo") and TargetCo's shareholders (the "TargetCo Shareholders") for its previously announced ‎reverse take-over transaction (the "RTO").

CHC also wishes to announce that upon the execution of the Definitive Agreement, Simon Nyilassy and Thomas Murphy resigned as directors of CHC and two nominees of the TargetCo Shareholders, Jean ‎‎(Ted) Pomerleau and Wayne Tisdale, were appointed as directors of CHC to fill the vacancies resulting from ‎their resignations. In addition, Simon Nyilassy and Harry Atterton resigned as CEO and CFO, ‎respectively, of CHC and Ron Schwarz, a director and the Chair of CHC, was appointed to serve as Acting CEO and Acting CFO ‎of CHC on an interim basis pending completion of the RTO.‎

About the RTO

Under the Definitive Agreement, CHC will complete the RTO by acquiring from the TargetCo Shareholders all of the shares of TargetCo, a corporation incorporated under the laws of Alberta, in exchange for the issuance of 10,000,000 common shares of CHC ("Common Shares") to the TargetCo Shareholders. Following the completion of the RTO, TargetCo will be a wholly-owned subsidiary of CHC and the business of CHC (following completion of the RTO, referred to as the "Resulting Issuer") will be the business of TargetCo, the directors and management of the Resulting Issuer will be reconstituted as described below, and it is expected that the Resulting Issuer will be listed on the TSX Venture Exchange (the "Exchange") as a Tier 2 Mining Issuer. The RTO is subject to the approval of the Exchange.

‎‎Upon completion of the RTO, Mr. Schwarz and Craig Smith will resign as directors of CHC and ‎will be replaced with two additional nominees of the TargetCo Shareholders, Robert Meister and another individual to be identified, joining Messrs. Pomerleau and Tisdale on the Board of Directors of the Resulting Issuer. The Resulting Issuer's reconstituted Board of Directors will then appoint a new CEO and CFO ‎for the Resulting Issuer.

Information about Messrs. Pomerleau and Tisdale is disclosed in CHC's press release about the RTO dated October 15, 2020. Mr. Meister is a partner of Caymus Advisors Inc., a corporate development and advisory company, and has experience working with public and private companies for over 25 years. His experience and entrepreneurial nature have allowed him to manage and develop numerous business and management activities including all aspects of business development, marketing and finance at institutional and retail levels in senior officer and executive leadership roles. Mr. Meister is currently the President and CEO of Myconic Capital Corp. (CSE) and the CFO of Black Mountain Gold USA Corp. (TSXV) and also a director of Moovly Media Inc. (TSXV) and Castlebar Capital Corp. (TSXV).

Under the terms of the Definitive Agreement, CHC will undertake a non-brokered private placement of 3,500,000 units of CHC at a price of $0.10 each for gross proceeds of $350,000 to be completed concurrently with or immediately prior to the closing of the RTO (the "Concurrent Financing"). Each unit will consist of one Common Share and one-half of one warrant. Each whole warrant will be exercisable to acquire one Common Share at an exercise price of $0.20 each for a period of 12 months from the date of issuance; ‎provided, however, that if, following the date of issuance, the volume-weighted average trading price of the ‎Common Shares on the Exchange is equal to or greater than $0.20 for any 10 consecutive trading day period, ‎the Resulting Issuer may, upon providing written notice to the holders of the warrants, accelerate the ‎expiry date of the warrants to the date that is 30 days following the date of such ‎notice. CHC may pay finder's fees to eligible parties in connection with the Concurrent Financing, all in accordance with the policies of the Exchange.

Under the terms of the Definitive Agreement, CHC will also change its name to "Bullet Exploration Inc." or such other name as may be designated by the TargetCo Shareholders, amend its articles to remove certain share terms relating to CHC's previous qualification as a mutual fund corporation for tax purposes related to its previous student housing business, and continue from Ontario to be a British Columbia corporation under the provisions of the Business Corporations Act (British Columbia).

CHC currently has 2,716,465 Common ‎Shares issued and outstanding. Upon completion of the RTO, including the Concurrent Financing, the Resulting Issuer will have a total of 16,216,465 Common Shares issued and outstanding, with the TargetCo Shareholders holding 10,000,000 Common Shares representing approximately 61.7% of the issued and outstanding Common Shares, the investors under the Concurrent Financing holding 3,500,000 Common Shares representing approximately 21.6% of the issued and outstanding Common Shares, and the current shareholders of CHC holding 2,716,465 Common Shares representing approximately 16.7% of the issued and outstanding Common Shares.

The TargetCo Shareholders consist of Mr. Pomerleau, Mr. Meister, Galloway Financial Services Inc., a corporation existing under the laws of the Cayman Islands which is owned or controlled by Mr. Tisdale, and Riaz Sumar. Messrs. Pomerleau, Tisdale and Meister will be directors of the Resulting Issuer and therefore Principals of the Resulting Issuer as defined in the policies of the Exchange. Upon completion of the RTO, each of the TargetCo Shareholders will own 2,500,000 Common Shares, representing approximately 15.4% of the issued and outstanding Common Shares.

CHC has called an annual and ‎special meeting of its shareholders to be held on January 6, 2020, at which ‎shareholder approval for the name change, share terms amendment and continuance will be sought. Shareholders owning, directly or indirectly, or exercising control and direction over, a total of 620,024 Common Shares, representing 22.8% of the issued and outstanding Common Shares, have entered into lock-up agreements with the TargetCo Shareholders agreeing to support the RTO and vote for the name change, the amendment to CHC's articles and the continuance at the shareholders meeting.

Completion of the RTO itself will not require shareholder approval since the RTO is not a Related Party Transaction (as defined in the rules and policies of the Exchange), no circumstances exist which compromise the independence of CHC or the interested parties with respect to the RTO, the RTO does not require the approval of shareholders of CHC under applicable corporate and securities laws, CHC is without active operations and is listed on the NEX board of the Exchange, and the Common Shares will resume trading on completion of the RTO.

The completion of the RTO is subject to the satisfaction of additional various conditions as are standard for a transaction of this nature, including but not limited to: (i) receipt of all necessary consents, waivers, permissions and approvals for the RTO, including the approval of the Exchange; (ii) the Resulting Issuer meeting the minimum listing requirements of the Exchange; (iii) the representations, warranties and covenants made by each party in the Definitive Agreement being true and correct in all material respects as of the closing date; (iv) no party being in material breach of its obligations under the Definitive Agreement; (v) no event or change occurring that would reasonably likely to have a material adverse effect on either CHC or TargetCo; (vi) the issuance of the Common Shares in connection with the RTO being exempt from prospectus requirements under applicable securities laws; (vii) TargetCo providing CHC with such financial statements for TargetCo as are required for the RTO; and (viii) TargetCo providing CHC with a technical report compliant with National Instrument 43-101 - Standards of Disclosure for Mineral Projects in respect of the Property (as defined below) acceptable to the Exchange.

The RTO is an Arm's Length Transaction as defined in the policies of the Exchange as all of the TargetCo Shareholders were arm's length to CHC at the time the Definitive Agreement was negotiated and entered into, and all of the directors and officers of CHC at the time the Definitive Agreement was negotiated and entered into are arm's length to TargetCo.

About TargetCo

TargetCo has entered into an option agreement (the "TargetCo Option Agreement") with Goldblock Capital Inc. ("Goldblock"), a public company listed on the Canadian Securities Exchange (the "CSE"), to acquire a 75% interest in the Canyon Creek copper-gold ‎project located in south-central British Columbia (the "Property"). The Property consists of 7 ‎claims owned by Seven Devils Exploration Ltd. and Multiple Metals Resources Ltd. (the "Optionors") in ‎which Goldblock has the right to earn a 100% interest in the Property, subject to a 1.5% Net Smelter Royalty to be retained by the ‎Optionors (the "NSR"), under an option agreement between ‎Goldblock and the owners dated April 25, 2018 (the "Goldblock Option Agreement"), by making ‎staged cash payments totalling $192,500 over three years from the date of such agreement (of which $117,500 has been paid) and completing exploration ‎expenditures totalling $450,000 over four years from the date of such Agreement (of which $109,727 has been incurred).‎ Goldblock has the right to purchase 0.5% of the NSR from the Optionors for $1,000,000.

Under the TargetCo Option Agreement, TargetCo has the exclusive right and option, assuming Goldblock acquires a 100% in the Proper‎ty in accordance with the Goldblock Option ‎Agreement, to acquire a 75% interest in the Project by making ‎staged cash payments totalling $245,000, issuing 1,300,000 shares of a public company (i.e., the Resulting Issuer) and completing exploration ‎expenditures totalling $575,000 over three years ending April 25, 2023.

On November 16, 2020, Goldblock, TargetCo and the Optionors entered into an ‎Acknowledgement, Assumption and Amendment Agreement (the "Comprehensive Agreement") to set out ‎the relative rights, interests and obligations of the Optionors, Goldblock and TargetCo (the ‎‎"Parties") in relation to the Goldblock Option Agreement and the TargetCo Option Agreement. ‎ In summary, the Comprehensive Agreement provides that:

(a) Goldblock is responsible for the final cash payment of $75,000 to the Optionors under the Goldblock Option Agreement.

(b) TargetCo shall assume and fund Goldblock's exploration expenditures obligations under the Goldblock Option Agreement and such expenditures shall be deemed to have been incurred by Goldblock in order to satisfy Goldblock's obligations under the Goldblock Option Agreement.

(c) In addition to any expenditures incurred by TargetCo on the Property, Goldblock shall fund any remaining exploration expenditures on the Property to be made by it under the Goldblock Option Agreement.

(d) If Goldblock fails to make the remaining cash payment or incur the remaining exploration expenditures under the Goldblock Option Agreement, then TargetCo shall have the right to cure such default by paying such amounts to the Optionors on behalf of Goldblock.

(e) Any exploration expenditures incurred and cash payments made by TargetCo to the Optionors shall be credited against the exploration expenditures and cash payments to be made by TargetCo under the TargetCo Option Agreement and TargetCo shall be deemed to have satisfied its obligations to Goldblock in respect of the exploration expenditures to be incurred or cash payments to be made to Goldblock under the TargetCo Option Agreement.

(f) In the event that the obligations of TargetCo and Goldblock are satisfied, then Goldblock shall have acquired a 100% interest in the Property, subject to the NSR.

(g) In the event that the obligations of TargetCo are satisfied, then TargetCo shall have acquired a 75% interest in the Property from Goldblock; provided, however, that if TargetCo made the final cash payment of $75,000 to the Optionors and incurred the remaining exploration expenditures due to a failure of Goldblock to satisfy such obligations, then TargetCo shall have instead acquired a 100% interest in the Property.

The Property is the subject of a National Instrument 43-101 technical report entitled "Technical Report on the Copper Canyon Property, Nicola Mining Division, British Columbia", prepared for Goldblock by D. Cullen, P.Geo., and J. Garry Clark, P.Geo., of Clark Exploration Consulting, dated effective December 5, 2019, amended January 12, 2020, and as may be further amended or replaced in connection with the RTO. A copy of the current technical report and additional information regarding the Property is available under Goldblock's profile on SEDAR at www.sedar.com.

The Property is located 30 kilometres west of Merritt in south-central B.C. The Property is located in map ‎sheet 92I/03, near UTM 629000mE, 5560000mN, (NAD83); 50.175° N latitude and 121.2° W longitude.‎

The Property lies entirely within the Spences Bridge Group geological unit. The dominant rock type found on the Property is thick stacks of basalt lava flows and associated dikes and breccias of the Spius formation. Sedimentary rocks associated with the Spius formation overlie an unconformity at the base of this formation to the east of the Property. This unconformity separates Spius formation rocks from the underlying Pimainus formation volcanic rocks which are also only exposed to the east of the Property. There is one mapped intrusion on the Property, which has not been age dated or been conclusively associated with a particular suite of intrusions in the region. One new mineral occurrence (the "MGT" showing) has been identified in the Spius formation and several geochemical anomalies remain unexplained on the Property.

Exploration Facilitation Unlimited conducted an exploration program (June 12, 2019 to June 26, 2019) on the Property on behalf of Goldblock. 312 soil samples and 76 rock samples were collected to test the presence of gold and base metal mineralization on the Property. Approximately 11km of Magnetometer-VLF survey were conducted at the north of the claims. All the exploration focussed on the projected strike of mineralization at MGT.

The Prospect Valley Project of Westhaven Ventures Inc. lies immediately south of the Property and ties onto the Property. In a similar geological environment to the Property, the Prospect Valley property lies within the Intermontane Tectonic Belt of the Canadian Cordillera. It is almost entirely underlain by the Spius Creek Formation of the Cretaceous Spences Bridge Group, which is dominated by andesite and basalt flows with local flow breccia. Low-sulphidation epithermal mineralization has been found in outcrop at the Discovery, NIC and Northeast Extension zones and in float at the Bonanza Valley target. Bonanza Valley, Discovery and Northeast Extension are aligned along a north-northeast trend and are hypothesized to be related to a multi-kilometre scale fault system extending across the Property. A resource estimate was completed on the Discovery Zone using 45 drill holes and 3,609 assays for Au and Ag. Gold assays within the North zone were capped at 7 g/t Au while erratic high assays in the South Zone were capped at 4.3 g/t Au. The Discovery Zone hosts an inferred resource estimated at 166,000 ounces Au grading 0.511 g/tonne Au from 10.1 million tonnes, above a cut-off grade of 0.30 g/tonne Au (Awmack and Giroux 2012).

Results, information and mineralization from adjoining or adjacent properties cannot be assured to or necessarily indicate it occurs on the Property. Where adjacent property information is mentioned, the reader is cautioned to distinguish information from an adjacent property and the Property and that there is no implication that similar information will be obtained from the Property. Adjoining property information is obtained from publicly available, adjacent property owner's websites, the media, authorised property visits or travel through public lands, or from B.C. Government Minfile, ARIS, Geoscience or Canadian government websites.

In 2006 Strongbow Exploration Inc. conducted regional silt sampling, reconnaissance prospecting and mapping, and detailed road and grid soil sampling on a large property that included most of the current Property. This work resulted in the discovery of the MGT showing, or zone, from which an assay of 21260ppm Cu (i.e. 2.126% Cu) and 247ppb Au was obtained from a single rock sample. This showing comprises an area of locally intense argillic alteration several meters across, hosted in Spius Creek basalt, next to fine grained felsic porphyry. Mineralization comprises spotty chalcocite hosted in irregular discontinuous quartz veins. A core of moderately intense argillic alteration is surrounded by a much more pervasive and extensive propylitic alteration extending tens of meters into the local host rocks. Structures and mineralization appear to be localized, although there is significant talus cover in the area that may be hiding a lower extension of this alteration.

Given the relative impermeability of the Spius formation, this small showing, with attendant argillic alteration, may open up at depth in the underlying Pimainus formation which is generally very porous. Spatially, this showing is on the margin of, and may be genetically related to, one of several intrusions on the property group.

An exploration program comprised of prospecting and geological mapping, additional rock / soil sampling and airborne geophysics is required to evaluate the gold bearing potential of the Property. Focus on the area of the MGT showing, as well as in the southern area of the Property is required to evaluate the presence of any gold mineralization. The soil sampling done by Goldblock in 2019 was relatively limited in scope, and can easily be expanded to both the north and south. The exploration program integrated with the airborne magnetic and electromagnetics will allow for targeting diamond drilling to test the gold potential.

TargetCo was newly formed by the TargetCo Shareholders for purposes of entering into the TargetCo Option Agreement and completing the RTO. There is no significant financial information respecting TargetCo or the Property at this time.

Additional Information

No sponsor has been retained in connection with the RTO and CHC will apply to the Exchange for an exemption from the requirement to retain a sponsor and provide a sponsorship report. There is no assurance that the exemption will be granted by the Exchange and CHC may be required to retain a sponsor and provide the sponsorship report.

Further details about the RTO, including further particulars of the Resulting Issuer and the Property, will be provided in a filing statement ‎of CHC to be prepared and filed in respect of the RTO. Investors are cautioned that, except ‎as disclosed in the filing statement, any information released or received with respect to the RTO may not be accurate or complete and should not be relied upon. Trading in the securities of CHC should be considered highly speculative.‎

All information contained in this press release with respect to CHC and TargetCo was supplied for inclusion herein by the respective parties and each party and its directors and officers have relied on the other party for any information concerning the other party.

Trading of the Common Shares of CHC has been halted and will not resume until completion of the RTO. CHC will issue a further news release as soon as further details are available regarding the RTO and the resumption of trading.

Mr. Garry Clark, P. Geo., of Clark Exploration Consulting, is the "qualified person" as defined in National Instrument 43-101, who has reviewed and approved the technical contents in this press release.

Completion of the RTO is subject to a number of conditions, including but not limited to, Exchange acceptance and if applicable disinterested shareholder approval. Where applicable, the RTO cannot close until the required shareholder approval is obtained. There can be no assurance that the RTO will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the management information circular or filing statement to be prepared in connection with the RTO, any information released or received with respect to the RTO may not be accurate or complete and should not be relied upon. Trading in the securities of CHC should be considered highly speculative.

The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed RTO and has neither approved nor disapproved the contents of this press release.

For further information please contact Ronald Schwarz, Chair of CHC, by email at schwarzkopf@rogers.com or by telephone at 416-593-7085.

Notice on Forward-Looking Information

Information set forth in this news release contains forward-looking statements. These statements reflect management's current estimates, beliefs, intentions and expectations regarding the future, including, but not limited to, CHC's completion of the RTO and related transactions including the completion of the Concurrent Financing, the proposed directors and officers of the Resulting Issuer, the conditions to be satisfied for the completion of the RTO including the approval of the Exchange, the filing of CHC's filing statement, the exemption from sponsorship and the resumption of trading. Such statements are not guarantees of future performance. They are subject to risks and uncertainties that may cause actual results, performance or developments to differ materially from those contained in the statements, including risks related to factors beyond the control of CHC. Such factors include, among other things: the requisite approvals of the shareholders noted above may not be obtained; the Exchange may not approve the RTO; sufficient funds may not be available or raised pursuant to the Concurrent Financing; and other risks that are customary to transactions of this nature. No assurance can be given that any of the events anticipated by the forward-looking statements will occur or, if they do occur, what benefits CHC will obtain from them. Except as required under applicable securities legislation, CHC undertakes no obligation to publicly update or revise forward-looking information.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/69752