RCCMF - Nippon Announces Amendment of its Joint-Venture Agreement with Material Japan Inc. and a Non-Brokered Private Placement

(TheNewswire)

Brossard (Quebec) – TheNewswire - December 18 th , 2020 - Nippon Dragon Resources Inc.(“Nippon” or “NDR”) (TSXV:NIP) (OTC:RCCMF) , is pleased announcethat Nippon Dragon Resources Inc. (’NDR’) and Material Japan Inc.(‘MJ’ and together with NDR, the ‘Parties’) have reached anagreement to amend their Joint-Venture Agreement (JV). Reference ismade to the JV entered into by the Parties dated March 15 th , 2019 asamended on August 1 st , 2019 (1 St JV Amendment)and together with the JV (Amended JV Agreement) (see news releasedated March 28, 2019 for more information on the terms of the JointVenture).

The Parties have agreed to proceed with a secondAmendment (the “Amendment”) to the Amended JV Agreement subject tothe following terms and conditions:

• -- The Amended JV Agreement isamended by terminating the 1 st JV Amendment, thereby removing Nippon’sRocmec-1 project from the Joint Venture, such that the original JVagreement shall remain the only binding agreement between the Partiesand related solely to the Denain project;

• -- As consideration for theAmendment to the Amended JV Agreement, the cash advances made by MJunder the Amended JV Agreement and the termination of the1 st JV Amendment, NDR has agreed to make a total payment of Cdn$525,000.00to MJ as follows: (i) a cash payment of $25,000.00 (the ‘CashPayment) and (ii) 10 million common shares of NDR (the ‘NDRShares’) at a deemed price of Cdn$0.05 per NDR Share (the ‘SharePayment’). The Cash Payment and Share Payment shall be completed byNDR concurrently with the closing of the Offering (see details below).The issued shares shall be subject to a hold period of four months andone day from the date of issuance;

• -- NDR obtaining the requiredcorporate and regulatory approvals, including the approval of the TSXVVenture Exchange;

• -- NDR having completed theOffering for gross proceeds of at least Cdn$1.2 million.

The entering into the Agreement is considered to be a"related party transaction" for purposes of MultilateralInstrument 61-101 – Protection of Minority Security Holders in SpecialTransactions ("MI 61- 101") and Policy5.9 – Protection of Minority Security Holders in SpecialTransactions of the TSX Venture Exchange. Nippon is relying onexemptions from the formal valuation and minority shareholder approvalrequirements available under MI 61-101. Nippon is exempt from theformal valuation requirement in section 5.4 of MI 61-101 in relianceon sections 5.5(a) and (b) of MI 61-101 as the fair market value ofthe transaction is not more than the 25% of Nippon's marketcapitalization, and no securities of Nippon are listed or quoted fortrading on prescribed stock exchanges or stock markets. Additionally,Nippon is exempt from minority shareholder approval requirement insection 5.6 of MI 61-101 in reliance on section 5.7(a) as the fairmarket value of the transaction is not more than the 25% of Nippon’smarket capitalization.

Non-Brokered Private Placement

Additionally Nippon is pleased to announce that itintends to complete a non-brokered private placement of up to Cdn$2,000,000 through theissuance of a combination of flow-through units (“FT Units”) at aprice of Cdn$0.05 per FT Unit and hard-dollar units (“HD Units”)at a price of Cdn$0.05 per HD Unit (the “Offering”).

Each FT Unit will be comprised of one (1) common shareof the Company that qualifies as a “flow-through common share” (a“FT Share”), and one-half of one common share purchase warrant(each whole warrant, a “FT Unit Warrant”), with each FT UnitWarrant entitling the holder thereof to acquire one additional commonshare of the Company at a price of $0.075 for a period of twenty-four(24) months following the closing of the Offering. Each HD Unit willbe comprised of one (1) common share of the Company and one (1) commonshare purchase warrant (each a “Unit Warrant”), with each UnitWarrant entitling the holder thereof to acquire one additional commonshare of the Company at a price of $0.075 for a period of twenty-four (24) months following the closing of theOffering.

The proceeds from the sale of the HD Units will be usedfor corporate and general working capital purposes. The proceeds fromthe issuance of the FT Units will be used for “Canadian explorationexpenses” and will qualify as "flow-through miningexpenditures" (the "Qualifying Expenditures"), as defined in subsection 127(9) of the Income TaxAct (Canada). The Company intends to renounce the QualifyingExpenditures to subscribers of FT Units for the fiscal year endedDecember 31, 2020.

The Offering is expected to close shortly but in anyevent prior to December 31 st , 2020 and is subject to receipt of allnecessary regulatory approvals, including approval of the TSX VentureExchange. The securities issued pursuant to the Offering will besubject to a statutory hold period of four months and one day inaccordance with applicable securities laws.

This news release doesnot constitute an offer to sell or a solicitation of an offer to buynor shall there be any sale of any of the securities in anyjurisdiction in which such offer, solicitation or sale would beunlawful, including any of the securities in the United States ofAmerica. The securities have not been and will not be registered underthe United States Securities Act of 1933, as amended (1933 Act) or anystate securities laws and may not be offered or sold within the UnitedStates or to, or for account or benefit of, U.S. Persons (as definedin Regulation S under the 1933 Act) unless registered under the 1933Act and applicable state securities laws, or an exemption from suchregistration requirements is available.

About Nippon

Nippon is active in the exploration and the developmentof gold resources in Quebec. The Corporation holds two goldproperties, Rocmec 1 with resources recognised in accordance withNI43-101 and the Denain property. Nippon also has an exclusive licensefor the Thermal Fragmentation mining method.

Le présent communiqué est disponible en françaissite web de Ressources Nippon Dragon.

The company’s growth strategy is based on:

• - The development of its golddeposits with the objective of producing revenue from itsoperations;

  - Increasing the value of its miningassets by prioritizing its exploration targets; and

  - The commercialisation andemployment of its thermal fragmentation technology.

For additional information:

John Stella, Investor relations        (514)718-7976 jstella@nippondragon.com

Jean-Yves Therien, Interim President &CEO (450) 510-4442 jytherien@nippondragon.com

Neither TSX Venture Exchange nor itsRegulation Services Provider (as that term is defined in the policiesof the TSX Venture Exchange) accepts responsibility for the adequacyor accuracy of this release. This press releaseincludes certain statements that may be deemed "forward-lookingstatements". All statements in this release, other thanstatements of historical facts, that address future explorationdrilling, exploration and production activities and events ordevelopments that the Corporation expects, are forward lookingstatements. Although the Corporation believes the expectationsexpressed in such forward-looking statements are based on reasonableassumptions, such statements are not guarantees of future performanceand actual results or developments may differ materially from those inforward-looking statements. Factors that could cause actual results todiffer materially from those in forward looking statements includemarket prices, exploitation and exploration successes, continuedavailability of capital and financing, and general economic, market orbusiness conditions.

Ressources Nippon Dragon ResourcesInc. 7055 Taschereau Blvd., suite 500, Brossard (Québec) J4Z1A7

Tel: (450)510-4442 www.nippondragon.com

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