DEEP:CC - Deeprock Minerals Inc. Signs Letter Agreement for Spin-Off and Reverse Takeover with Allied Critical Metals Corp.

(TheNewswire)

Vancouver, British Columbia – June14, 2024 – TheNewswire – Deeprock MineralsInc. (the " Company " or" Deep ")(CSE Symbol: “DEEP”), is pleased to announce thatit has signed a letter agreement (the " Letter Agreement ") dated June 14, 2024 with Allied Critical MetalsCorp. (" ACM " or " Allied Critical Metals "), which providesthe general terms and conditions of the spin-out transaction of Deepand subsequent reverse takeover of the Company by Allied CriticalMetals (the " Transaction "), pursuant to the policiesof the Canadian Securities Exchange (the " Exchange ") andapplicable securities laws.

Allied Critical Metals is a private companyincorporated under the laws of Ontario, Canada, having a registeredoffice in Toronto, Ontario, which is engaged in the acquisition,exploration, and potential development of tungsten projects inPortugal. ACM owns, through its wholly owned Portuguese subsidiary,ACM Tungsten Unipessoal Lda. (“ PortCo ”), a Portuguese company named PanMetals Unipessoal Lda. (“ PanMetals ”), which beneficially owns 90% of thetwo historical and established Portuguese tungsten projects (the" TungstenProjects "): the Borralha Tungsten Project(" Borralha "); and the Vila Verde Tungsten Project(" Vila Verde "), and ACM has the right to purchase the remaining 10%of the Tungsten Properties at a discount. Borralha is comprised of aMining License that allows for production of up to 150,000 tonnes peryear of mineralized material covering an area of 382.5 hectares (3.8sq. km). Vila Verde is comprised of an Experimental ExplorationLicense area covering 1,400 hectares (14 sq. km). Both properties werepast producing mines which have excellent infrastructure includingpaved and gravel roads, electricity, water, nearby skilled labour andthe ability to use existing waste dumps.

The Company and ACM are presently preparing therequired technical reports (the " Technical Reports ") in accordance with National Instrument43-101— Standards forDisclosure of Mineral Projects (" NI 43-101 ") for each of the Tungsten Projects, which will befiled under the Company's profile on SEDAR+ as a condition to closingthe Transaction. Further details of the Tungsten Projects will beprovided in the Technical Reports and a subsequent news release to bedisseminated prior to the closing of the Transaction.

ACM has raised approximately $2.15 million in equityfinancing over the past 12 months of which over $1.8 million has beenspent on drilling over 3,680m and other exploration and developmentthe Tungsten Projects, which includes a recent $250,000 strategicinvestment by Majestic Gold Corp. (TSXV: MJS) (“ Majestic ”) (see https://majesticgold.com ).Majestic has over 13 years’ experience itself in building andoperating underground and open pit mines. ACM believes itsrelationship with Majestic will be helpful as ACM progresses itsprojects through exploration and development towards the goal ofeventual production.

In addition, ACM and the Company are pleased toannounce that ACM has entered into an agency engagement with Fund BoxSociedade de Capital de Risco, S.A. (“ FundBox ”) (see www.fundbox.pt ), an international fund management and investment firm basedin Lisbon, Portugal to arrange for initial long-term debt financing ona best efforts basis of up to €11,000,000 (the “ Debt Financing ”)for ACM and its wholly-owned Portuguese subsidiary, Pan Metals. TheDebt Financing is comprised of convertible debentures (the“ Debentures ”) to be subscribed for and purchased by a fund(“ Fund ”) established by FundBox closing in one or more tranchesover a period of 24 months from May 31, 2024. The Debentures will havea terms of 5 years and bear interest at a rate of 5% per year, payablesemi-annually. The principal and any unpaid interest of the Debenturesmay be converted at the end of the term, at the election of the Fund,into RI Shares (as defined below) at the conversion price equal to thethen applicable 20-day volume weighted average price, subject to thepolicies of the Exchange. Since 2004, FundBox has raised more than€550 million. ACM believes its long-term Debt Financing will be keyin providing funding for both exploration and development expenses aswell as capital costs such as its intended Q42024 pilot plant (the “ PilotPlant ”) at Vila Verde that is capable ofprocessing up to 150,000 tonnes per year of mineralizedmaterial.

Roy Bonnell, CEO of Allied Critical Metals commented, "We are very excited tobe accelerating the advancement of these near-term, low-costPortuguese Tungsten Projects in the heart of the European Union wheredemand is sharply increasing as a strategic military metal andcritical mineral. The Tungsten Projects are brownfield historicalproduction sites located in northern Portugal with excellentinfrastructure and access to inexpensive water, power and skilledlabour and an existing road network. The projects are locatedapproximately 100 km northeast of the ocean port city of Porto forexcellent access to EU and North American markets. Borralha presentlyhas a 25-year mining license and Vila Verde has an experimental mininglicense that provide a clear path for furtherdevelopment."

The Letter Agreement for the Transaction is in additionand further to the Vila Verde net profits stream in respect of ACM’sintended Pilot Plant pursuant to a letter agreement between ACM andDeep dated March 19, 2024 (the “ NPS Agreement ”)announced by the Company in its news release dated March 20,2024.

Independent director of Deep, Tom Christoff added, "We are excited toexpand the potential of the NPS Agreement and unlock shareholder valuein our proposed spin-out with the additional opportunity presented byACM for near-term commercialization of its tungsten properties, wheretungsten has been declared a "critical mineral" by Canada,the USA, and the EU facing significant supply chain shortages as astrategic military metal with almost 90% of world supply dominated byChina and Russia."

The Transaction

The Company intends to complete the Transactionpursuant to a plan of arrangement (the “ Arrangement ”),which will include the following steps:

1. the Company will incorporate a wholly-owned subsidiary( Sub1 ”) and transfer all of its assets to Sub1 and then transferall of its common shares of Sub 1 to the Deep shareholders pro rata inproportion to their ownership of Deep (the “ Spin-Out ”);

2. the Company will consolidate all of its issued andoutstanding common shares on a 40-to-1 basis (the Consolidation ”) andchange its name to “ AlliedCritical Metals Corp. or such other name as maybe determined by ACM which is acceptable to the Exchange (the Name Change ”);

3. ACM shall complete a concurrent private placementequity financing of units (the Units ”) at a price of $0.60 per Unit toraise gross proceeds of up to $7,500,000 (the “ Concurrent Financing ”), and each Unit will be comprised of one common share ofACM and one common share purchase warrant of ACM (each whole warrant a“ Warrant ”) wherein each Warrant will be exercisable for a period of24 months from the date of issuance at a price of $1.00 per share;and

4. ACM will amalgamate (the Amalgamation ”) as athree-cornered amalgamation with a second newly incorporatedwholly-owned subsidiary of the Company (“ Sub2 ”) to form anamalgamated company (“ Amalco ”) as a wholly-owned subsidiary of theCompany, named “ACMHoldings Ltd.” Or such other name asdetermined by ACM, and the shareholders of ACM will transfer all oftheir common shares of ACM (the ACM Shares ”) to the Company in considerationfor post-Consolidation common shares of the Company as the resultingissuer (the “ ResultingIssuer ”) on a 1-for-1 basis (the Share ExchangeRatio ”), and the business of ACM shall becomethe business of the Resulting Issuer, and thecommon shares of the Resulting Issuer (the RI Shares ”) will belisted and posted for trading on the Exchange as a miningissuer.

Resulting Issuer CapitalStructure

Assuming completion of the Transaction with a minimumconcurrent Financing of $2,000,000 at $0.60 per Unit, the ResultingIssuer will have approximately 74,230,000 common shares issued andoutstanding, as well as 1,666,667 Warrants exercisable at $1.00 pershare, 927,500 warrants exercisable at $2.40 to $2.80, 266,666 brokerswarrants exercisable at $0.60, and no options.

Escrow Conditions

RI Shares issued pursuant to the Amalgamation shall besubject to resale restrictions pursuant to the policies of theExchange, and RI Shares issued to insiders of the Resulting Issuershall be subject to escrow in accordance with the policies of theExchange. However, RI Shares issued in exchange for ACM Shares issuedunder the Concurrent Financing shall be free trading and not besubject to resale restrictions, escrow or hold periods.

Subject to the policies of the Exchange and applicablesecurities laws, upon closing of the Transaction (the “ Closing ”):

(a) 19,600,000 commonshares of the Resulting Issuer held by principals of the ResultingIssuer will be subject to escrow wherein 10% of the shares will bereleased on Closing and 15% will be released every 6 months thereafterover 36 months; and

(b) 6,332,084 commonshares of the Resulting Issuer held by prior owners of the TungstenProperties will be subject to escrow wherein 10% of the shares will bereleased on Closing and 15% will be released every 6 months thereafterover 36 months.

Concurrent Financing

Prior to completion of the Transaction and as acondition precedent to the obligations of the Company, ACM intends tocomplete a concurrent financing (the " Concurrent Financing ") to raise aggregate gross proceeds of up to $7,500,000CAD by way of a private placement of units (the " Units ") of ACMat a price of $0.60 per Unit (the " Listing Price ").Each Unit will be comprised of one common share of ACM (each an" ACM Share ") and one-half common share purchase warrant of ACM(each a " Warrant ") and each Warrant will entitlethe holder to acquire an ACM Share at a price per ACM Share of $1.00for a period of 24 months from the date of issuance. On closing of theTransaction (the " Closing "). RI Shares issued in exchangefor ACM Shares issued under the Concurrent Financing shall be freetrading and not be subject to resale restrictions, escrow or holdperiods.

ACM and the Company intend to use the net proceeds ofthe Concurrent Financing to fund the costs of the Transaction, therecommended work programs described in the Technical Reports, and forgeneral working capital expenses of the Resulting Issuer.

Finders Fees

In conjunction with the Concurrent Financing, ACMintends to pay a finder's fee on Closing, subject to the policies ofthe Exchange, of up to a cash commission equal to up to 8% of thegross proceeds of from purchasers under the Concurrent Financingintroduced by the finder and a number of common share purchasewarrants (the “ BrokersWarrants ”) equal to up to 8% of the number ofUnits issued to purchasers under the ConcurrentFinancing introduced by the finder. Each Brokers Warrant will beexercisable into a RI Share for two years from the date of issuance atthe Listing Price.

Related Party Transaction

The Transaction is a related party transaction under Multilateral Instrument61-101—Protection of Minority Shareholders in SpecialTransactions (“ MI 61-101 ”) becauseeach of the Company and ACM share a same director and officer.However, the Company is exempt under section 5.5(b) of MI 61-101 fromthe requirement to obtain formal valuation because the Company is notlisted on a “specified market". However, the Company doesintend to seek majority of the minority shareholder approval andgeneral corporate shareholder approval for the Transaction and willprepare a management information circular (the “ Information Circular ”) in respect of the Transaction in accordance with thepolicies of the Exchange and applicable securities laws.

Exchange Listing

Upon completion of the Transaction, the ResultingIssuer will own 100% of Amalco, which will own 100% of PortCo, whichowns 100% of PanMetals, and PanMetals owns 90% of the TungstenProperties with the right to acquire the remaining 10%. Upon Closing,the Resulting Issuer expects to list on the Exchange as a miningissuer, subject to Exchange approval.

Conditions

Completion of the Transaction is subject to customaryconditions precedent, including:

1. ACM and Deep shall have executed a definitive agreementfor the Arrangement (the " Definitive Agreement "), which willcontain the applicable terms and conditions set forth therein and therepresentations, warranties, covenants, and terms and conditionscustomarily found in such agreements;

2. satisfactory completion of due diligence by each of ACMand Deep and their respective counsel of each other and theirrespective subsidiaries, business and assets;

3. absence of any material adverse effect on the financialor operational condition of the assets or business of each of theparties to the Definitive Agreement;

4. completion of the Technical Report for Borralha inaccordance with NI 43-101 and filing thereof under Deep's profile onSEDAR+;

5. completion and delivery to Deep of the title opinion inrespect of the Tungsten Projects;

6. representations and warranties of each of the ACM andDeep contained in the Definitive Agreement being true and correct asof the Closing Date, and there being no material breach of ACM or Deepof the representations, warranties and covenants in the LetterAgreement or Definitive Agreement;

7. Deep shall have advanced at least $200,000 to$1,000,000 to ACM under the NPS Agreement, and Deep shall have workingcapital of at least $100,000 as at Closing Date, excluding liabilitiesof up to $50,000 for reasonable costs and expenses incurred in theordinary course of business;

8. ACM and Deep shall be satisfied, acting reasonably,that the Tungsten Projects and ACM’s interests therein satisfies theExchange’s initial listing requirements;

9. receipt of all required regulatory, corporate and thirdparty approvals, including Deep shareholder approval, Exchangeapproval, and compliance with all applicable regulatory requirementsand conditions necessary to complete the Transaction;

10. delivery of standard completion documentation,including but not limited to, legal opinions, officers' certificates,and certificates of good standing or compliance; and

11. other mutual conditions precedent customary for atransaction such as the Transaction.

Directors, Officers and OtherInsiders

On completion of the Transaction, it is anticipatedthat the board of the Resulting Issuer will consist of five members,with ACM nominating four members and Deep nominating one member. OnClosing, all of the directors of Deep will resign other than AndrewLee, and Roy Bonnell, Sean O'Neill (as Non-Executive Chairman), JoaoBarros, and Colin Padget will be appointed as directors of theResulting Issuer. Roy Bonnell will be appointed as President and ChiefExecutive Officer, Keith Margetson as Chief Financial Officer, andAndrew Lee as Corporate Secretary. The Company will provide additionalinformation about its proposed new directors, officers and insiders ina subsequent news release and an Information Circular and a ListingStatement that will be prepared and filed under the Company's profileon SEDAR+ as the principal disclosure documents in respect of theTransaction.

Qualified Person

Douglas Blanchflower, B.Sc. (Hons.), P.Geo., is anindependent Qualified Person for the purposes of NI 43-101 and hasreviewed and approved the scientific and technical information in thisnews release.

Further Information

More details will follow in the Company’s InformationCircular and the Resulting Issuer’s Listing Statement to be preparedin accordance with the listing requirements of the CSEPolicies.

This news releasedoes not constitute an offer to sell or a solicitation of an offer tobuy any securities in the United States. The securities to be issuedin connection with the Transaction have not been and will not beregistered under the United States Securities Act of 1933, as amended(the “U.S. Securities Act”) or any state securities laws and maynot be offered or sold within the United Staters or to U.S. Personsunless registered under the U.S. Securities Act and applicable statesecurities laws or an exemption from such registration isavailable.

Completion of theTransaction is subject to a number of conditions, including but notlimited to, Exchange acceptance and if applicable pursuant to ExchangeRequirements, majority of the minority shareholder approval. Whereapplicable, the Transaction cannot close until the requiredshareholder approval is obtained. There can be no assurance that theTransaction will be completed as proposed or at all.

There can be noassurance that the Transaction will be completed as proposed, or atall. Investors are cautioned that, except as disclosed in the ListingStatement to be prepared in connection with the Transaction, anyinformation released or received with respect to the Transaction maynot be accurate or complete and should not be relied upon. Trading inthe securities of the Company should be considered highlyspeculative.

For further information concerning this press release,please contact the respective representatives of Solid and ACM asfollows:

The CanadianSecurities Exchange has in no way passed on the merits of theTransaction and has neither approved nor disapproved the contents ofthis news release.

Cautionary Statement andForward-Looking Information

All information contained in thisnews release with respect to the Company and ACM was supplied by theparties, respectively, for inclusion herein, and each such party hasrelied on the other party for any information concerning suchparty.

Certain statements contained in thispress release constitute forward-looking information, includingstatements regarding the expected issuance of approval of theCompany’s shareholders and the Exchange and the expectedcommencement of trading of the common shares of the Resulting Issueron the Exchange. These statements relate to future events or futureperformance. The use of any of the words “could”, “intend”,“expect”, “believe”, “will”, “projected”,“estimated” and similar expressions and statements relating tomatters that are not historical facts are intended to identifyforward-looking information and are based on the parties’ currentbelief or assumptions as to the outcome and timing of such futureevents. Actual future results may differ materially. The business ofthe Company is subject to a number of material risks anduncertainties. Please refer to SEDAR+ filings for further details.Various assumptions or factors are typically applied in drawingconclusions or making the forecasts or projections set out inforward-looking information. Those assumptions and factors are basedon information currently available to the parties. The materialfactors and assumptions include the parties being able to obtain thenecessary corporate, regulatory and other third parties approvals. Theforward looking information contained in this release is made as ofthe date hereof and the parties are not obligated to update or reviseany forward looking information, whether as a result of newinformation, future events or otherwise, except as required byapplicable securities laws. Because of the risks, uncertainties andassumptions contained herein, investors should not place unduereliance on forward looking information. The foregoing statementsexpressly qualify any forward looking information containedherein.

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