Persta Resources Inc. (incorporated under the laws of Alberta with limited liability) (Stock Code: 3395)

Transcription

1 Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement. This announcement is for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for the securities of the Company. Persta Resources Inc. (incorporated under the laws of Alberta with limited liability) (Stock Code: 3395) ISSUE OF UNLISTED WARRANTS PURSUANT TO LOAN AGREEMENT REGARDING C$25,000,000 SUBORDINATED DEBT FACILITY UNDER GENERAL MANDATE The Board is pleased to announce that, on 15 May 2018 (after trading hours), the Company as borrower entered into the Loan Agreement with the Subscriber as lender, pursuant to which the Subscriber has agreed to grant the Loan to the Company in the principal amount of C$25,000,000 for a term of 5 years. On the same day, as agreed under the Loan Agreement, the Company has issued the Warrant Certificate to the Subscriber, pursuant to which the Company has agreed to issue a total of 8,000,000 Warrants. The Warrants carry rights to subscribe for Warrant Shares at the Exercise Price of HK$3.16 per Warrant Share (subject to adjustments). Each Warrant confers the rights to subscribe for one Warrant Share. The subscription right(s) of the Warrant Share(s) will be exercisable from the initial advance of the Loan to five years following the date of Closing. Subject to adjustments, the maximum number of Warrant Shares issuable is 8,000,000 Shares, representing approximately 2.87% of the issued share capital of the Company as at the date of this announcement and approximately 2.79% of the issued share capital of the Company as enlarged by the Warrant Shares. No listing of the Warrants will be sought on the Stock Exchange or any other stock exchanges, but the Company will apply to the Listing Committee for the listing of, and permission to deal in, the Warrant Shares which may fall to be issued upon exercise of the subscription rights attaching to the Warrants. 1

2 THE LOAN AGREEMENT The Board is pleased to announce that on 15 May 2018 (after trading hours), the Company as borrower entered into the Loan Agreement with the Subscriber as lender, pursuant to which the Subscriber has agreed to grant the Loan to the Company in the principal amount of C$25,000,000 for a term of 5 years. The principal terms of the Loan Agreement are summarized as follows: Date 15 May 2018 (after trading hours) Parties (1) the Company, as the borrower; and (2) the Subscriber, as the lender. To the best knowledge, information and belief of the Directors, and having made all reasonable enquiries, the Subscriber and its ultimate beneficial owners are Independent Third Parties. Principal amount Canadian dollars twenty five million (C$25,000,000). Advances of the Loan Canadian dollars twenty million (C$20,000,000) was advanced to the Company at Closing and, subject to the terms of the Loan Agreement, an additional Canadian dollars five million (C$5,000,000) to be advanced to the Company over a six-month period. Interest rate A fixed interest of 12% per annum on outstanding amounts, determined daily, compounded and to be paid monthly. Maturity date 5 years from Closing. Repayment Unless otherwise specified, the Company shall repay in full the principal amount of the Loan, together with interest accrued and unpaid thereof on the maturity date of the Loan. 2

3 Prepayment The Company shall have the right to prepay C$10,000,000 of the Loan, in whole but not in part, after 1 year following Closing subject to a Prepayment Fee. Also, the Company may, after 18 months following Closing, prepay the principal amount of the Loan in one or more tranches of no less than C$5,000,000, subject to a Prepayment Fee. Issue of Warrant The Company shall grant the Subscriber a total of 8,000,000 Warrants. Each Warrant shall entitle the Subscriber to subscribe for one Warrant Share at the Exercise Price of HK$3.16 (subject to adjustments). Consideration of Warrant The Warrants will be issued at the aggregate consideration of C$750,000. Given the grant of the Loan, the Directors consider that the consideration for the issue of the Warrants is fair and reasonable and is in the interests of the Company and the Shareholders as a whole. Conditions Issuance of the Warrants and, should the Subscriber exercise its rights under the Warrants, the Warrant Shares are subject to, among other things, the followings: (1) if required, that the Listing Committee having approved the issue of the Warrants or Warrant Shares either unconditionally or subject to such conditions to which both the Company and the Subscriber shall reasonably accept; (2) the Listing Committee having granted the listing of,andpermissiontodealin,thewarrantshares either unconditionally or subject to such conditions to which both the Company and the Subscriber shall reasonably accept, and such permission and listing not subsequently being revoked or withdrawn prior to the issuance of Warrant Shares; and (3) the Company having obtained, without prejudice to conditions (1) and (2) above, all necessary consents, approval and waivers required for or in connection with the issue of the Warrants and Warrant Shares. Ranking of the Warrant Shares The Warrant Shares, when issued and fully paid, will rank pari passu in all respects with the existing issued Shares as at the date of allotment. 3

4 Voting rights The holder(s) of the Warrants will not have any right to attend or vote at any meeting of the Company by virtue of them being the holders of the Warrants. The holder(s) of the Warrants shall not have the right to participate in any distributions and/or offers of further securities made by the Company. INFORMATION ON THE SUBSCRIBER The Subscriber is principally engaged in financing transactions originated and managed by Crown, which consist of senior and subordinated loans to mid-market companies with a need for growth capital. Crown is a specialty finance company focused on providing growth capital to successful Canadian and select U.S. companies. Crown also manages capital pools, including some in which Crown has a direct ownership interest. THE WARRANT CERTIFICATE The Board is pleased to announce that on 15 May 2018 (after trading hours), the Company issued the Warrant Certificate to the Subscriber as agreed under the Loan Agreement. The principal terms of the Warrant Certificate are summarised as follows: Date 15 May 2018 Parties (1) the Company, as the issuer; and (2) the Subscriber, as the subscriber. To the best knowledge, information and belief of the Directors, and having made all reasonable enquiries, the Subscriber, Crown and their ultimate beneficial owners are Independent Third Parties. Securities to be issued The Company issued an aggregate of 8,000,000 Warrants to the Subscriber. The Warrants carry rights to subscribe for Warrant Shares at the Exercise Price of HK$3.16 per Warrant (subject to adjustments). Each Warrant carries the right to subscribe for one Warrant Share. Number of Warrants The Company issued 8,000,000 Warrants to the Subscriber in registered form and constituted by the Warrant Certificate on 15 May

5 Number of Warrant Shares issuable As at the date of this announcement, the Company has a total of 278,286,520 Shares in issue. Assuming there is no further issue or repurchase of the Shares and there is no adjustment to the Exercise Price, upon the full exercise of the subscription rights attaching to the Warrants, 8,000,000 Warrant Shares with an aggregate nominal value of HK$25,280,000 will be allotted and issued, representing approximately 2.87% of the issued share capital of the Company as at the date of this announcement and approximately 2.79% of the issued share capital as enlarged by the Warrant Shares. Issue Price The Issue Price (not including legal expenses) is C$ per Warrant. The net issue price, after deduction of relevant expenses, is approximately C$ per Warrant. Exercise Price The Exercise Price is HK$3.16 per Warrant Share, represents: (1) a premium of approximately 85.88% over the closing price of HK$1.70 per Share as quoted on the Stock Exchange on the Last Trading Day; (2) a premium of approximately 79.55% over the average closing price of HK$1.76 per Share as quoted on the Stock Exchange for the last five consecutive trading days up to and including the Last Trading Day; (3) a premium of approximately 74.49% over the average closing price of HK$1.81 per Share as quoted on the Stock Exchange for the last ten consecutive trading days up to and including the Last Trading Day; and (4) a price equivalent to the share price of the Company s Last Financing. The Exercise Price shall be subject to adjustments and any dilutive events which may have adverse effects on the rights of the holders of the Warrants (if any). The Exercise Price will be paid to the Company upon exercise of the Warrant. The aggregate of the Issue Price of C$ per Warrant and the Exercise Price of HK$3.16 per Warrant Share, i.e. approximately HK$3.74, represents: (1) a premium of approximately 120% over the closing price of HK$1.70 per Share as quoted on the Stock Exchange on the Last Trading Day; (2) a premium of approximately % over the average closing price of HK$1.76 per Share as quoted on the Stock Exchange for the last five consecutive trading days up to and including the Last Trading Day; 5

6 (3) a premium of approximately % over the average closing price of HK$1.81 per Share as quoted on the Stock Exchange for the last ten consecutive trading days up to and including the Last Trading Day; and (4) a price equivalent to the share price of the Company s Last Financing. The Exercise Price and the aggregation of it with the Issue Price were determined after arm s length negotiations between the Company and the Subscriber, taking into account, among other things, the Company s past performance, the recent trading prices of the Shares and the recent market conditions. Accordingly, the Board considers that the terms of the Warrant Certificate and the Warrants are fair and reasonable and in the best interest of the Company and the Shareholders as a whole. Adjustments to the Exercise Price The Exercise Price will be subject to adjustments in certain events, including: (1) an alteration of the nominal amount of the Shares by the Company by reason of any consolidation, reclassification or sub-division; (2) an offer or grant by the Company to Shareholders for subscription by way of rights or of options or warrants to subscribe for or purchase new Shares at a price which is less than 95% of the market price of the Shares (calculated in accordance with the terms of the Warrant Certificate); (3) a special distribution (as defined in the Warrant Certificate) made by the Company; (4) a capital reorganization (as defined in the Warrant Certificate) made by the Company; and (5) any action taken by the Company affecting the Shares in circumstances where the Directors consider that it may be appropriate to make an adjustment to the Exercise Price. The Board considers that the above are normal anti-dilutive adjustment events. Exercise Period The subscription rights attaching to the Warrants can be exercised at any time during the period commencing from the initial advance of the Loan under the Loan Agreement to five years commencing from the date of Closing. Upon expiry of the Exercise Period, any Warrants which have not been exercised will lapse and cease to be valid for any purpose. Put Right In the event of a Warrant Trigger Event, the Company shall promptly provide written notice of the Warrant Trigger Event to the registered holder of the Warrants and the registered holder of the Warrants may, at any time following the Warrant Trigger Event but prior to the expiry of the Exercise Period, demand that the Company purchase all the Warrants represented by the Warrant Certificate at the applicable Redemption Price by delivery of the Put Demand Notice to the Company. 6

7 The applicable Redemption Price shall be payable to the registered holder of the Warrants in immediately available funds of the Company within 30 days following the Company s receipt of the Put Demand Notice. Upon exercise of the Warrant Put, the right to purchase the Shares represented by the Warrant Certificate shall terminate and the Warrant Certificate shall represent the right of the registered holder of the Warrants to receive only the applicable Redemption Price from the Company. In the event that the Warrant Shares are issued but are not approved for listing on the Stock Exchange either (i) prior to their issuance; or (ii) within 90 days from and after the date of their issuance, the put right provided above shall mutatis mutandis apply to such Warrant Shares. Transferability The Warrants shall not be transferable by the registered holder of the Warrant Shares at any time unless (i) at least 30 months have passed since the Effective Date; or (ii) the Warrant Shares are transferred to an affiliate or subsidiary (as defined under the ABCA) of the registered holder of the Warrant Shares, and in each case, the registered holder of the Warrant Shares complies with the applicable laws of Alberta, Canada. Hold periods and legending of Warrant Certificate Unless permitted under applicable securities laws of Alberta, Canada, the registered holder of the Warrant Shares shall not trade the Warrant Shares before the day that is 4 months and one day after the later of (i) 15 May 2018; and (ii) the date the Company became a reporting issuer in any province or territory in Canada. Application for listing In the event that the Subscriber exercises its rights under the Warrant Certificate to purchase the Warrant Shares, application will be made to the Listing Committee of the Stock Exchange for the listing of, and permission to deal in, the Warrant Shares which may fall to be allotted and issued upon exercise of the subscription rights attaching to the Warrants. No listing of the Warrants will be sought on the Stock Exchange or any other stock exchanges. GENERAL MANDATE TO ISSUE THE WARRANT SHARES The issue of the Warrant Shares upon exercise of the subscription rights attaching to the Warrants is not subject to the Shareholders approval. The Shares to be allotted and issued upon exercising of the subscription rights attaching to the Warrants will be allotted and issued pursuant to the General Mandate, which was granted to the Directors by a resolution of the Shareholders passed at the AGM, under which the Directors are authorized to issue Shares up to a maximum of 20% of the aggregate nominal amount of the share capital of the Company in issue as at the date of the AGM, which is equivalent to a maximum issue of 7

8 an additional 55,657,304 Shares. The 8,000,000 Warrant Shares, to be allotted and issued upon full exercise of the subscription rights attaching to the Warrants, will utilize approximately 14.37% of the General Mandate. As at the date of this announcement, save for the proposed issue of the Warrant Shares upon exercise of the subscription rights attaching to the Warrants, the Company has not utilized the General Mandate. REASONS FOR AND BENEFIT OF ENTERING INTO THE LOAN AGREEMENT AND THE ISSUE OF WARRANTS The Company is principally engaged in natural gas and crude oil exploration and production, with a focus on natural gas. The Company focuses on long-term growth through acquisition, exploration, development and production in the Western Canadian Sedimentary Basin. The gross proceeds and net proceeds from the issue of the Warrants will be approximately HK$4.54 million and HK$4.24 million, respectively, which are intended to be used as general working capital of the Company. Any additional proceeds from the issue of the Warrant Shares upon the exercise of the subscription rights attaching to the Warrants in future up to a maximum amount of approximately HK$25.28 million will be applied as the general working capital of the Company. Assuming the full exercise of the subscription rights attaching to the Warrants, approximately HK$25.28 million will be raised. The Company does not anticipate any additional expenses will be incurred should the Warrant be exercised in full or in part. Assuming the full exercise of the subscription rights attaching to the Warrants, the total net funds to be raised from the Warrant Shares will be approximately HK$29.7 million, and the total net funds to be raised from the Loan Agreement and Warrant Shares will be approximately HK$ million. The Board considers that the Loan Agreement and the Warrant Certificate were on normal commercial terms after arm s length negotiations between the Company and the Subscriber and that the terms (including the Issue Price and the Exercise Price) are fair and reasonable so far as the interests of the Company and its Shareholders as a whole are concerned. The Directors also consider that the Loan Agreement and the issue of the Warrants to the Subscriber would attract the desirous funding for business development and would provide the Company with an opportunity to raise further funds when the Subscriber exercises the subscription rights attaching to the Warrants. USE OF PROCEEDS The Company has completed an initial draw under the Loan Agreement of C$20 million. C$9.5 million has been applied to the Company s senior debt to bring it to approximately C$9.0 million. The remaining C$10.5 million from the first draw, C$5.0 million from the final draw under the Loan Agreement and any proceeds received from the Warrant Shares will be used for working capital purposes. 8

9 With the signing of the Loan Agreement and Warrant Certificate, and giving effect to the Company s forecast cashflow from new and existing production, the Company believes it has access to sufficient capital to fund its capital programme for This programme calls for drilling up to four (4) wells at Basing, which will be tied into the Company s existing gas gathering network. FUND RAISING ACTIVITIES IN THE PAST TWELVE MONTHS The Company has not conducted any fund raising activities in the past twelve months before the date of this announcement. SHAREHOLDING STRUCTURE As at the date of this announcement, the Company has 278,286,520 Shares in issue. The shareholding structure of the Company (i) as at the date of this announcement; and (ii) immediately after the issue of the 8,000,000 Warrant Shares, assuming that there will be no further changes in the issued share capital of the Company prior to such exercise and no adjustment to the Issue Price, are set out as below for illustration purposes only: Substantial Shareholders Asatthedateofthis announcement No. of Shares (Shares) Approximate percentage of total issued Shares (%) (Note 9) Immediately after the exercise of the subscription rightsattachingtothe Warrants in full No. of Shares (Shares) Approximate percentage of total issued Shares (%) (Note 9) Aspen Investment Holdings Ltd. (Note 1) 187,290, ,290, Ji Lin Hong Yuan Trade Group Limited (Notes 1 & 2) 187,290, ,290, Alberta Ltd. (Notes 1 & 3) 187,290, ,290, Changchun Liyuan Investment Co. Ltd. (Note 4) 187,290, ,290, Mr. Jing (Notes 1 & 5) 187,290, ,290, Mr. Bo (Notes 1& 6) 187,290, ,290, Ms. Jing Hou (Note 7) 187,290, ,290, Mr. Guang Jing (Note 8) 187,290, ,290, Subscriber 8,000, Public shareholders 69,571, ,571, Total 278,286, ,286, Notes: 1. Aspen Investment Holdings Ltd. ( Aspen ) holds 185,982,932 Shares and is owned as to approximately 41.09% by Ji Lin Hong Yuan Trade Group Limited ( JLHY ), 39.69% by Alberta Ltd. ( 164 Co ), and 19.22% by Changchun Liyuan Investment Co. Ltd. ( Liyuan ). Pursuant to the unanimous shareholders agreement dated December 18, 2015 (the Unanimous Shareholders Agreement ) and the first supplemental unanimous shareholders agreement dated April 29, 2016 (the First Supplemental Unanimous Shareholders Agreement ), Aspen, Mr. Yuan Jing ( Mr. Jing ), JLHY, Mr. Le Bo ( Mr. Bo ), 164 Co, Liyuan and Ms. Jing Hou (being spouse of Mr. Bo) 9

10 became a group of Controlling Shareholders (as defined in the Listing Rules) acting in concert and therefore Aspen is deemed to be interested in all the Shares in which Mr. Jing and Mr. Bo are interested in under the SFO, which in aggregate represent approximately 67.30% of the total issued Shares of the Company. 2. JLHY is held as to 60% by Mr. Jing and 40% by Mr. Guang Jing, Mr. Jing s brother. Pursuant to the Unanimous Shareholders Agreement and the First Supplemental Unanimous Shareholders Agreement, JLHY is deemed to be interested in all the Shares in which Aspen, Mr. Jing, Mr. Bo, 164 Co and Liyuan are interested in under the SFO, which in aggregate represent approximately 67.30% of the total issued Shares of the Company. 3. Mr. Bo holds 1,000 class D voting preferred shares in 164 Co, representing approximately 99.01% voting rights of 164 Co. Pursuant to the Unanimous Shareholders Agreement and the First Supplemental Unanimous Shareholders Agreement, 164 Co is deemed to be interested in all the Shares in which Aspen, Mr. Jing, JLHY, Mr. Bo and Liyuan are interested in under the SFO, which in aggregate represent approximately 67.30% of the total issued Shares of the Company. 4. Liyuan is owned as to approximately 98%, 1% and 1% by JLHY, Zhou Li Mei and Jing Yue Li, respectively. In addition, pursuant to the Unanimous Shareholders Agreement and the First Supplemental Unanimous Shareholders Agreement, Liyuan is deemed to be interested in all the Shares in which Aspen, Mr. Jing, JLHY, Mr. Bo and 164 Co are interested in under the SFO, which in aggregate represent approximately 67.30% of the total issued Shares of the Company. 5. Mr. Jing holds 427,332 Shares, equivalent to approximately 0.15% of the total issued Shares of the Company. Mr. Jing is also interested in 60% of the equity interest in JLHY. Pursuant to the Unanimous Shareholders Agreement and the First Supplemental Unanimous Shareholders Agreement, Aspen, Mr. Jing, JLHY, Mr. Bo, 164 Co and Liyuan become parties acting in concert and therefore Mr. Jing is deemed to be interested in the Shares in which Aspen, JLHY, Mr. Bo, 164 Co and Liyuan are interested in under the SFO, which in aggregate represent approximately 67.30% of the total issued Shares of the Company. 6. Mr. Bo holds 440,000 Shares, equivalent to approximately 0.16% of the total issued Shares of the Company. He is the spouse of Ms. Jing Hou ( Ms. Hou ) and is therefore deemed to be interested in 440,000 Shares held by Ms. Hou under the SFO. Mr. Bo is one of the trustees of The Bo Family Trust. Mr. Bo also holds 1,000 class D voting preferred shares in 164 Co, representing approximately 99.01% of the voting rights of 164 Co. Pursuant to the Unanimous Shareholders Agreement and the First Supplemental Unanimous Shareholders Agreement, Aspen, Mr. Jing, JLHY, Mr. Bo, 164 Co and Liyuan become parties acting in concert and therefore Mr. Bo is deemed to be interested in the Shares in which Aspen, Mr. Jing, JLHY, 164 Co and Liyuan are interested in under the SFO, which in aggregate represent approximately 67.30% of the total issued Shares of the Company. 7. Ms. Hou holds 440,000 Shares and is one of the trustees of The Bo Family Trust. She is the spouse of Mr. Bo and is thereforedeemedtobeinterestedinallthesharesinwhichmr.boisinterestedinunderthesfo. 8. Mr. Guang Jing holds 40% of the equity interest in JLHY and is therefore deemed to be interested in all the Shares in which JLHY is interested in under the SFO. 9. Certain percentage figures included in the table are subject to rounding adjustment. IMPLICATIONS UNDER THE LISTING RULES Pursuant to Rule 15.02(1) of the Listing Rules, the Warrant Shares to be issued on exercise of the Warrants must not, when aggregated with all other equity securities remain to be issued on exercise of any other subscription rights, if all such rights were immediately exercised, whether or not such 10

11 exercise is permissible, exceed 20% of the issued share capital of the Company at the time the Warrants are issued. Options granted under share option schemes which comply with Chapter 17 of the Listing Rules are excluded for the purpose of such limit. As at the date of this announcement, there are no securities with subscription rights outstanding and not yet exercised. Assuming (i) full exercise of the subscription rights attaching to the Warrants at the Exercise Price of HK$3.16; and (ii) no Shares are further issued and repurchased, 8,000,000 Warrant Shares will be issued, which represent approximately 2.87% of the existing issued share capital of the Company and approximately 2.79% of the issued share capital as enlarged by the issue of the Warrant Shares as at the date of this announcement. Accordingly, the issue of the Warrants is in compliance with Rule 15.02(1) of the Listing Rules. DEFINITIONS In this announcement, the following expressions shall have the following meanings, unless the context requires otherwise: ABCA Business Corporations Act (Alberta), as amended, supplemented or as otherwise modified from time to time AGM the annual general meeting of the Company held on 9 June 2017 Board C$ Closing Company connected person(s) Crown the board of the Directors Canadian dollars, the lawful currency of Canada issuance of the Warrant Certificate, concurrently with the completion of the transaction contemplated by the Loan Agreement Persta Resources Inc., a company incorporated with limited liability under the laws of Alberta on 11 March 2005 and whose shares are listed on the main board of The Stock Exchange has the meaning ascribed to it under the Listing Rules Crown Capital Partners Inc., a company incorporated with limited liability under the laws of Canada on 8 September 1999 and whose shares are listed on the Toronto Stock Exchange under the stock symbol CRWN 11

12 Current Market Price Director(s) the price per Share equal to the weighted average price at which the Shares have traded on the Stock Exchange for the 10 Trading Days prior to the relevant date or, if the Shares are not listed on the Stock Exchange, on any other stock exchange on which the Shares are listed or, if the Shares are not listed on any stock exchange, the price being determined by the Directors acting reasonably and in good faith after consultation with a Canadian or internationally recognized and independent investment dealer, investment banker or a firm of chartered accountants the director(s) of the Company Effective Date 15 May 2018 Exercise Period Exercise Price General Mandate HK$ the period during which the holder(s) of the Warrant Share(s) may exercise the subscription right(s) attaching to the Warrant(s) HK$3.16 (subject to adjustments), being the exercise price per Warrant Share at which the holder of each Warrant may subscribe for the Warrant Shares the general mandate granted to the Directors by the resolution of the shareholders of the Company passed at the AGM to allot, issue and deal with the Shares and to make or grant offers, agreements and options which may require Shares to be allotted, issued or dealt with, of up to 55,657,304 Shares Hong Kong dollars, the lawful currency of Hong Kong Hong Kong The Hong Kong Special Administrative Region of the People s Republic of China Independent Third Party(ies) Issue Price Last Financing person(s) who or company(ies) together with its/their ultimate beneficial owner(s) which, to the best of the Directors knowledge, information and belief having made all reasonable enquiries, is/are third party(ies) independent of the Company and its connected person(s) in accordance with the Listing Rules C$ , being the issue price per Warrant the initial public offering on the Stock Exchange where the Company raised approximately C$38 million through the offering of 69,850,000 common shares at HK$3.16 par value 12

13 Last Trading Day Listing Committee Listing Rules Loan Loan Agreement Prepayment Fee Put Demand Notice Redemption Price SFO Share(s) Shareholder(s) Stock Exchange Subscriber 15 May 2018, being the last trading day of the Shares on which the Warrant Certificate was issued has the meaning ascribed to it under the Listing Rules the Rules Governing the Listing of Securities on the Stock Exchange, as amended, supplemented or as otherwise modified from time to time the term loan in the amount of C$25,000,000 granted by the Subscriber to the Company pursuant to the terms of the Loan Agreement the loan agreement dated 15 May 2018 entered into between the Subscriber and the Company in relation to the grant of the Loan to the Company if C$10,000,000 of the Loan is prepaid after 15 May 2019, a payment of 1% of the amount repaid; if the principal amount of the Loan is prepaid between 15 November 2019 and 15 May 2021, in one or more tranches of no less than C$5,000,000, plus all accrued and unpaid interest owning on the principal amount of the Loan being repaid, a payment of 3% of the principal amount of the Loan being prepaid; if the principal amount of the Loan is prepaid between 15 May 2021 and 15 May 2023, in one or more tranches of no less than C$5,000,000, plus all accrued and unpaid interest owning on the principal amount of the Loan being repaid, a payment of 1% of the principal amount of the Loan being repaid a written notice from the registered holder of the Warrant to the Company in connection with the Warrant Put the amount equal to the product obtained by multiplying (i) the number of Warrants subject to the Warrant Put by (ii) the amount by which the Current Market Price of the Shares on the date the registered holder of the Warrant Shares sends the Put Demand Notice to the Company exceed the Exercise Price the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) the common share(s) of no par value in the capital of the Company the holder(s) of the common shares of the Company The Stock Exchange of Hong Kong Limited Crown Capital Fund IV, LP, a limited partnership governed by the laws of Alberta, Canada 13

14 Trading Day(s) Warrant(s) Warrants Certificate Warrant Put Warrant Share(s) Warrant Trigger Event U.S. the day(s) on which the Stock Exchange is open for business the total of 8,000,000 unlisted transferable warrants to be issued by the Company at the Issue Price pursuant to the Warrant Certificate, each conferring rights entitling its holder(s) to subscribe for one Warrant Share at the Exercise Price during the Exercise Period the warrant certificate dated 15 May 2018 issued by the Company to the Subscriber the right to demand that the Company purchase all the Warrants at the applicable Redemption Price the new Shares to be allotted and issued by the Company upon the exercise of the subscription rights attaching to the Warrants the event where the Warrant Shares are not approved for listing on the Stock Exchange within 90 days from the Effective Date United States of America % per cent. By Order of the Board Persta Resources Inc. Le Bo Chairman Calgary, 15 May 2018 Hong Kong, 15 May 2018 As at the date of this announcement, the executive Director is Mr. Le Bo; the non-executive Director is Mr. Yuan Jing; and the independent non-executive Directors are Mr. Richard Dale Orman, Mr. Bryan Daniel Pinney and Mr. Peter David Robertson. 14