Melior announces private placement to raise up to $1.8 million

TORONTO, Dec. 14, 2016

Key Highlights:

• Non-brokered private placement for gross proceeds of C$1.8 million
• Subscription by Melior's four largest shareholders
• Subscription price of C$0.03 per Common Share

Subject to completion of definitive documentation and approval of the TSX Venture Exchange (the "TSXV"), Pala Investments Limited ("Pala"), Belmont Park Investments Pty Ltd. ("Belmont"), Panorama Ridge Pty Ltd. ("Panorama") and Takota Asset Management Inc. ("Takota"), each existing shareholders of the Company, have agreed to subscribe for C$1.1 million, C$250,000, C$250,000 and C$200,000 of common shares ("Common Shares") of the Company under the Private Placement respectively. Under the terms of the Private Placement, the Corporation will issue up to 60,000,000 Common Shares at a price of C$0.03 per Common Share. In connection with the Private Placement, the TSXV has granted a discretionary waiver from the TSXV's $0.05 minimum pricing requirement pursuant to Section 3 (Discretionary Waivers) of the TSXV bulletin dated April 7, 2014. 

Mark McCauley, the Chief Executive Officer of the Company said today "I would like to thank this group of shareholders for showing great support and confidence in the Company. This funding, along with the recently announced Preliminary Economic Assessment, should allow Melior to progress its strategy of assessing prospective strategic partners and take advantage of the recent improvement in the titanium feedstock market."

Based on a C$1.8 million Private Placement, the proceeds of the Private Placement are anticipated to be used by the Company as follows:

Goondicum mine maintenance and development costs:	$1,362,000 ARIVA.DE Börsen-Geflüster Kurse Melior Resources -   0,00%
Instalment payments to Rothschild in connection with previously disclosed litigation:	$286,000
Melior general and administrative expenses:	$152,000

The subscriptions by Pala and Takota 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 Private Placement is designed to improve the Company's financial position and that the terms of the Private Placement and Pala and Takota's subscription for Common Shares thereunder are reasonable in the Company's circumstances.  As such, Melior intends to rely on the exemption from the formal valuation and minority shareholder approval requirements of MI 61-101 contained in Section 5.5(g) and Section 5.7(1)(e) of MI 61-101 on the basis of financial hardship.

The Common Shares will be offered and sold only to accredited investors in Canada or persons in other jurisdictions to whom Common Shares may be offered and sold pursuant to the Private Placement without breach of applicable securities laws. The Private Placement will be completed in one or more tranches and the securities issued under the Private Placement will have a hold period of four months and one day from the applicable closing date of each tranche. The Private Placement remains subject to TSXV approval.

Pursuant to the Private Placement, Pala, Belmont, Panorama and Takota will receive 36,666,667, 8,333,333, 8,333,333 and 6,666,667 Common Shares respectively. Following the Private Placement, Pala, Belmont, Panorama and Takota will hold 131,194,865, 26,877,149, 26,877,149 and 35,426,134 Common Shares respectively, representing approximately 48%, 9.9%, 9.9% and 13% of the issued and outstanding Common Shares respectively.

Forward Looking Statements Disclaimer

Statements made in this news release may be forward-looking and therefore subject to various risks and uncertainties. Such statements can typically be identified by terminology such as ''may'', ''will'', ''could'', ''should'', ''expect'', ''plan'', ''anticipate'', ''believe'', ''intend'', ''possible'', ''continue'', "objective" or other similar expressions concerning matters that are not historical facts. Certain material factors or assumptions are applied in making forward-looking statements and actual results may differ materially from those expressed or implied in such statements. Melior does not undertake to update any forward-looking statements; such statements speak only as at the date made.

Going Concern Risk

As described in Melior's MD&A, the continuing operations of the Company are dependent upon its ability to continue to raise adequate financing, to commence profitable operations in the future, and repay its liabilities arising from normal business operations as they become due. There remains a significant risk that the Company is unable to find alternative sources of financing for on-going working capital requirements. There is a risk that the Company may not complete the Private Placement on the terms or for the proceeds currently anticipated. These material uncertainties cast significant doubt upon the Company's ability to continue as a going concern. 

Failure to obtain sufficient financing, including as a result of a failure to complete the Private Placement on the terms and for the proceeds currently anticipated, could result in a delay or abandonment of the Goondicum Mine and could force the Company into reorganization, bankruptcy or insolvency proceedings. Additional financing may not be available when needed or, if available, the terms of such financing might not be favourable to the Company and might involve substantial dilution to existing shareholders. Failure to raise capital when needed would have a material adverse effect on the Company's ability to pursue its business strategy, and accordingly could negatively impact the Company's business, financial condition and results of operations.

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.

SOURCE Melior Resources Inc.