NORTHCLIFF PROVIDES UPDATE ON EXTRAORDINARY GENERAL MEETING OF SHAREHOLDERS

VANCOUVER, BC, Aug. 18, 2022 /CNW/ - Northcliff Resources Ltd. ("Northcliff" or the "Company") (TSX: NCF) will host its previously announced Extraordinary General Meeting of Shareholders (the "Meeting") on Thursday, August 25, 2022 at 10:00 a.m., local time, at 14^th Floor – 1040 West Georgia Street, Vancouver, British Columbia, Canada. The Meeting materials are located under the Company's SEDAR profile at www.sedar.com.

NOTE ON COVID-19 PANDEMIC

Given the continuing public health impact of the COVID-19 pandemic, considerations regarding the health and safety of our employees, shareholders and other stakeholders, shareholders are strongly encouraged to vote in advance by one of the methods described in the Management Information Circular dated July 26, 2022 (the "Circular") prepared in connection with the Meeting.

UPDATE IN RESPECT OF MEETING

On June 23, 2022, the Company announced it had entered into two secured loan agreements ("Loan 1" and "Loan 2" or the "Loan Funding") for an aggregate amount of up to C$5.95 million with Todd Sisson (NZ) Limited ("Todd"), a subsidiary of the Todd Corporation, the Company's largest shareholder. Each of Loan 1 and Loan 2 is a "related party transaction" as defined under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions ("MI 61-101"). Loan 1, which was advanced in full to the Company on July 19, 2022, is a secured loan facility in the amount of $750,000, bears interest at a rate of 10% per annum and is repayable on the earlier of its stated maturity or on the initial advance under Loan 2. Loan 2 is a secured loan facility in the amount of C$5.2 million, will bear interest at a rate of 10% per annum and can be drawn down in 4 tranches (if shareholders approve Loan 2 at the Meeting).

The Company has also amended the terms of the outstanding C$1,000,000 loan facility with Todd that was previously announced on August 30, 2021 (the "2021 Loan"), such that Todd has the right to convert the 2021 Loan concurrently with any conversion under Loan 2, rather than only on maturity of the advances made under the 2021 Loan (the "Amendment").

Todd currently holds 47.83% of the issued and outstanding shares of Northcliff and an 11.5% interest in the Sisson Project Limited Partnership ("Sisson Partnership"). Northcliff owns an 88.5% interest in the Sisson Partnership, which owns the Sisson Tungsten-Molybdenum Project (the "Sisson Project").

The Company would like to provide shareholders with the following additional information in respect of the Loan Funding and the Amendment:

1. Treatment of Loan 1 under MI 61-101. Loan 1 is exempt from the formal valuation and minority shareholder approval requirements under MI 61-101. Loan 1 falls under paragraph (j) of the "related party transaction" definition under MI 61-101. Formal valuations are only required for related party transactions that are described in any of the paragraphs (a) to (g) of the definition of "related party transaction". With regard to the minority shareholder approval requirement, Loan 1 would fit under the "Loan to Issuer, No Equity or Voting Component" exemption under section 5.7(1)(f) of MI 61-101 as the terms of Loan 1 are not less advantageous to the Company than if it had been obtained from a person dealing at arm's length with the Company, and Loan 1 is not convertible or repayable as to principal or interest, in each case, directly or indirectly, in equity or voting securities of the Company, the Sisson Partnership, or otherwise participating in nature.
   
   
2. Conversion Terms of Loan 2. The Circular notes that each tranche advanced under Loan 2 is convertible at the election of Todd into common shares of the Company or interest in the Sisson Partnership at maturity of the relevant tranche.  The Company wishes to clarify that each tranche advanced under Loan 2 is convertible at the election of Todd into common shares of the Company or interest in the Sisson Partnership at any time (i.e., not only at maturity of the relevant tranche).
   
   
3. Effect of Amendment. The sole effect of the Amendment is to enable Todd to convert the principal amount and any accrued interest under the 2021 Loan at any time that Todd decides to convert on any outstanding balance (principal and interest) under Loan 2. For clarity, under the original terms of the 2021 Loan (without giving effect to the Amendment), the first $500,000 tranche of the 2021 Loan would have only become convertible by Todd at maturity on September 1, 2022 and the second $500,000 tranche of the 2021 Loan would have only become convertible by Todd at maturity on January 10, 2023.  The conversion price of the 2021 Loan will not be changed as a result of the terms of the Amendment. The Amendment will have no practical effect on the 2021 Loan if Loan 2 is not approved by shareholders and drawn upon by the Company.
   
   
4. Additional Background to Loan Funding. Please refer the "Background to the Transaction" section of the Circular. In addition, the Company notes that the terms of the Loan Funding reflect a number of factors. The Loan Funding is required to maintain the Company's assets in good standing, for working capital purposes and to advance the Sisson Project, including obtaining an extension of the deadline for the start of construction under the New Brunswick Environmental Impact Assessment in respect of the Sisson Project. To successfully meet these objectives, the Company approached Todd in order to secure funding, following discussions with various other third parties on a number of indicative non-binding proposals. Todd made an initial non-binding proposal in respect of the Loan Funding on April 7 2022, and negotiations between the Company and Todd over the following months based on such non-binding proposal resulted in execution of definitive agreements with respect to the Loan Funding on June 23, 2022. The Amendment resulted from the objective of both the Company and Todd (expressed early in negotiation of the Loan Funding) to allow for the capital structure of the Company to be simplified (i.e., by providing a way for the 2021 Loan to be converted at the same time as Loan 2) with a view to encouraging further potential third party investments in the Company.
   
   
5. Formal Valuation and Special Committee. When the Company concluded that a formal valuation would be required under MI 61-101 in respect of Loan 2, the board of the Company (the "Board") immediately established a special committee (the "Special Committee") to supervise the preparation of the formal valuation. The mandate of the Special Committee also included considering the proposed Loan Funding (including related party considerations) and making recommendations to the Board. The Special Committee recommended the engagement of SLR Consulting Limited to conduct a formal valuation of the Sisson Project. There are no prior valuations (as such term is defined in MI 61-101) that have been made in the 24 months before July 26, 2022, the existence of which is known, after reasonable inquiry, to the Company or any director or senior officer of the Company, that relate to the subject matter of, or is otherwise relevant to, the Loan Funding. The Special Committee recommended the Loan Funding to the Board on May 25, 2022 and the Board approved the Loan Funding on the same date. The Company notes that the Special Committee's recommendation and the Board's approval of the Loan Funding occurred prior to completion of the formal valuation.  The Special Committee and the Board reached their decisions to approve the Loan Funding in part on the basis that: (i) there was a degree of urgency in securing the Loan Funding and drawing on Loan 1 (which occurred on July 19, 2022) in order to meet the Company's near-term objectives as described in item #4 above and (ii) the shareholders would ultimately have the benefit of the formal valuation in advance of their vote on the approval of Loan 2 at the Meeting (and Loan 2 would not be advanced without such approval). For good corporate governance, the Special Committee re-confirmed its recommendation of Loan 2 to the Board on July 16, 2022 following the finalization of the formal valuation and the Board re-confirmed its approval at the meeting held on July 16, 2022.
   
   
6. Todd Shares to be Excluded from Minority Approval. As disclosed in the Circular, Todd currently holds 102,626,569 common shares of the Company. For the avoidance of doubt, such common shares will be excluded for the purposes of determining minority approval for Loan 2.
   
   
7. TSX Approval. The TSX has provided its acceptance of Loan 1 and the Amendment. The TSX has also provided its conditional acceptance of Loan 2, subject to minority shareholder approval of Loan 2 and the satisfaction of other customary conditions.

About Northcliff Resources Ltd.

Northcliff is a mineral resource company focused on advancing the feasibility-stage Sisson Tungsten-Molybdenum Project located in New Brunswick, Canada, to production. Additional information on Northcliff is available on the website at www.northcliffresources.com. Investor services can be reached at [phone] or within North America at 1-800-667-2114.

On behalf of the Board of Directors

Andrew Ing
President & Chief Executive Officer

Forward-Looking Information

This news release contains forward-looking information based on current expectations.  Forward-looking information is provided for the purpose of presenting information about management's current expectations and plans relating to the future and readers are cautioned that such statements may not be appropriate for other purposes.  Forward looking information may include, without limitation, approval of Loan 2 by shareholders, the receipt of the Loan Funding, and the expected use of the Loan Funding, the opinions or beliefs of management, prospects, opportunities, priorities, targets, goals, ongoing objectives, milestones, strategies, and outlook of Northcliff, and includes statements about, among other things, future developments, the future operations, strengths and strategy of Northcliff.  Generally, forward looking information can be identified by the use of forward looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". These statements should not be read as guarantees of future performance or results.  These statements are based upon certain material factors, assumptions and analyses that were applied in drawing a conclusion or making a forecast or projection, including Northcliff's experience and perceptions of historical trends, the ability of Northcliff to maximize shareholder value, current conditions and expected future developments, as well as other factors that are believed to be reasonable in the circumstances including receipt of the Loan Funding.

Although such statements are based on management's reasonable assumptions at the date such statements are made, there can be no assurance that it will be completed on the terms described above and that such forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such forward-looking information.  Accordingly, readers should not place undue reliance on the forward-looking information. Northcliff assumes no responsibility to update or revise forward-looking information to reflect new events or circumstances unless required by applicable law.

For additional information regarding forward-looking statements and their related risks, please refer to the "Risk Factors" section in the Annual Information Form of the Company for the year ended on October 31, 2021, which is available on the Company's SEDAR profile at www.sedar.com.

SOURCE Northcliff Resources Ltd.

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