Melior announces amendment to loan facility and provides update on previously disclosed Rothschild litigation

TORONTO, Nov. 9, 2016

Amendment to Loan Facility

Pursuant to the terms of the agreement, Pala has agreed to make available an additional US$300,000 to the Company, which amount will be added to the currently outstanding US$2.7 million principal amount under the Pala Facility, for an aggregate outstanding principal amount of US$3 million. The Pala Facility will have a maturity date of October 31, 2022, bear interest at 10% per annum and may not be prepaid prior to October 31, 2017 except upon completion of a Liquidity Event. On or following October 31, 2017 the principal amount outstanding plus all accrued interest may be prepaid at the option of the Company without penalty or called by Pala. In addition, if, at any time prior to October 31, 2017, the Company announces or completes a change of control transaction or sale of 25% or more of its interests or assets (each, a "Liquidity Event") relating to the Goondicum ilmenite and apatite mining and processing facility and resulting in proceeds of more than US$4 million, a mandatory prepayment of the Pala Facility will be required and all principal and accrued interest shall become due and payable including payment of a customary make whole amount (the "Make Whole Amount") of up to US$2 million. The Make Whole Amount is restricted to the pool of funds that consists of 70% of the amount by which the proceeds of such Liquidity Event exceed US$4 million ("Liquidity Excess") with recourse limited to the Liquidity Excess, if any, to a maximum of US$2 million.  The proceeds of a Liquidity Event shall include any amounts payable directly or indirectly to Melior, its affiliates or its securityholders in connection with the Liquidity Event. 

The new proceeds of the Pala Facility will be used by Melior for working capital purposes and for settlement of certain amounts owed to Rothschild pursuant to the previously announced September 6, 2016 decision of the Court of Appeal of Milan.

In addition, Pala has agreed to grant Melior a put option (the "Put Option") in respect of the 47,272,727 Asian Mineral Resources Limited ("AMR" and TSX-V: ASN) shares owned by Melior (the "AMR Shares").  Under the terms of the Put Option, the put price per AMR Share will be equal to the lesser of (i) CAD$0.024 and (ii) the 30-day VWAP of the AMR Shares traded on the TSX Venture Exchange (the "TSXV") calculated as of market close on the day prior to the day the AMR Put Option is exercised by the Company less 10%. At AMR's current 30-day VWAP the Put Option is valued at approximately CAD$1.134 million to Melior. The Put Option may be exercised by Melior at any time following the closing of the previously announced acquisition by AMR of Kasbah Resources Limited (ASX: KAS) pursuant to an Australian scheme of arrangement, until February 28, 2017. The exercise of the Put Option remains subject to approval of the TSXV pursuant to TSXV Policy 5.3 – Acquisitions and Dispositions of Non-Cash Assets.

The entering into of the amendment to the Pala Facility and grant of the Put Option constitute "related party transactions" within the meaning of Multilateral Instrument 61-101 – Protections of Minority Security Holders in Special Transactions ("MI 61-101"). The Board of Directors of Melior (the "Board"), acting in good faith, and the independent members of the Board, acting in good faith, have determined that the Company is in serious financial difficulty, that the Pala Facility and Put Option are designed to improve the Company's financial position and that the terms of the amended Pala Facility and the Put Option are reasonable in the Company's circumstances. As such, Melior intends to rely on the exemption from the minority shareholder approval requirements of MI 61-101 contained in Section 5.7(1)(e) of MI 61-101 on the basis of financial hardship.

In connection with the proposed amendment to the Pala Facility, Melior has obtained written consent to the proposed amendment from holders of more than 50% of the issued and outstanding common shares of Melior that are not held (beneficially or of record) by Pala.