Palladium One and MetalCorp Enter into Definitive Agreement for a Business Combination

Palladium One and MetalCorp Enter into Definitive Agreement for a Business Combination

Palladium One Mining Inc. (TSXV: PDM) (FSE: 7N11) (OTCQB: NKORF) ("Palladium One" or "PDM") and MetalCorp Limited (TSXV: MTC) ("MetalCorp" or "MTC") are pleased to announce a definitive agreement (the "Arrangement Agreement") for a business combination to be completed under a plan of arrangement.

Palladium One has agreed pursuant to the Arrangement Agreement to acquire all of the issued and outstanding shares of MetalCorp by way of a statutory plan of arrangement under the Business Corporations Act (Ontario) (the "Transaction"). Pursuant to the Transaction, MetalCorp shareholders ("MTC Shareholders") will receive, in exchange for each common share in the capital of MetalCorp (a "MTC Share") held, 0.30 (the "Exchange Ratio") of a common share in the capital of Palladium One (each whole share, a "PDM Share").

The Exchange Ratio implies a purchase price of C$0.026 per MTC Share, or gross consideration of C$3.3 million. The number of PDM shares to be issued on completion of the Transaction is approximately 38,703,051.

Existing shareholders of PDM will hold approximately 88% of PDM immediately following completion of the Transaction, and the former MTC Shareholders will hold approximately 12% immediately following completion of the Transaction.

Figure 1. Location map of Ontario mineral properties. Red are Critical Mineral nickel-copper projects, yellow are gold projects.

"This transaction advances our strategy of creating value by responsibly, establishing a partnership with a senior producer and growing a portfolio of critical mineral assets in Canada in support of North American critical mineral supply chains, and it also increases liquidity," commented Derrick Weyrauch, Chief Executive Officer of PDM.

"We are pleased to be combining MetalCorp's business with Palladium One," commented Donald Sheldon, Chief Executive Officer of MTC. "Like MetalCorp, Palladium One has an excellent suite of properties including gold, PGEs, copper - nickel and a strong cash position.

Based on the TSXV closing prices of each company on the day the agreement was signed, this transaction reflects a 28% premium for MetalCorp shareholders."

Transaction Highlights:

- PDM will maintain the earn-in agreement in favour of Barrick Gold Inc. ("Barrick"), on MetalCorp's Hemlo East Project adjacent to Barrick's producing Hemlo Gold Mine (>21 million ounces mined to date) and located 40 kilometers southwest of PDM's Tyko Project.

- MetalCorp's assets include two critical mineral projects located in Ontario, a Tier 1 mining jurisdiction (Figure 1):

-- North Rock Copper - Nickel Project
---- Road accessible, permitted, exploration stage.
---- A historical resource estimate.

-- Big Lake BL-14 Copper - Zinc - Gold - Silver VMS-style Project
---- Road accessible, exploration stage.

- MetalCorp's assets also include a royalty portfolio of five exploration stage mineral projects located in Ontario, the principal royalty being:

-- Hemlo Annex Property (Barrick):
---- 2% NSR royalty.
---- 176 hectares between Barrick's Hemlo gold mine and the Hemlo East Project.

- The business combination strengthens the proforma cash position to approximately C$13 million as of December 31, 2022.

Upon completion of the Transaction, Palladium One will benefit from the following:

- Three district scale, road accessible massive sulphide, magmatic nickel - copper projects located in Tier 1 mining jurisdictions:

1. Tyko Nickel - Copper - Cobalt Project (30,000 hectares), Ontario Canada
-- Extremely high tenor Massive Sulphides in a new untested Nickel District

2. CanAlask Nickel - Copper Project (3,400 hectares), Yukon Canada
-- Large-scale ultramafic body with multiple high-grade nickel - copper - PGE showings.

3. KS Nickel - Copper - PGE Project (16,000 hectares), Finland
-- Potential for extremely high tenor sulphide: ~ 3 oz per tonne precious metals, ~10% nickel and ~13% copper (based on 100% sulphide using metal tenors of the adjacent LK Project).

- LK Platinum-Group-Element (PGE) - Copper - Nickel Project in Finland
-- National Instrument 43-101 compliant Mineral Resource Estimate (April 2022)

- North Rock Copper - Nickel Project (7,000 hectares), Ontario Canada
-- Covers 20 kilometers of the Grassy Portage layered mafic intrusion and hosts four known zones of copper-nickel sulphide mineralization.

- Hemlo East Earn-in agreement with Barrick Gold Inc. ("Barrick" or "ABX")
-- Hemlo East Project is adjacent to Barrick's producing Hemlo Gold Mine (>21 million ounces mined to date)
-- Located 40 kilometers southwest of the Tyko Project (see details above).
-- Earn-in agreement signed in November 2020.
-- On November 26, 2021, MetalCorp announced that Barrick provided a notice of Force Majeure due to permitting delays resulting in Barrick's inability to meet the performance obligations under the earn-in agreement. Barrick is maintaining the claims in good standing.

- C$4.4 million of assessment credits from MetalCorp resulting in no cash servicing requirements for at least ten years on the North Rock Cu-Ni, Big Lake Cu-Au VMS and the Black Bear Au Projects.

Figure 1. Location map of Ontario mineral properties. Red are Critical Mineral nickel-copper projects, yellow are gold projects.
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Transaction Details

The Transaction will be subject to the approval of at least 66 2/3% of the votes cast by MTC Shareholders, voting as a single class at a special meeting of the MTC Shareholders to be called to consider the Transaction, which is expected to be held near the end of April 2023 (the "Meeting"). In addition to the approval of the MTC Shareholders, the Transaction is also subject to the receipt of certain regulatory and court approvals, including the approvals of the TSX Venture Exchange ("TSXV"), and other closing conditions customary in transactions of this nature.

Pursuant to the Arrangement Agreement, unless otherwise excluded, all outstanding options exercisable into MTC Shares, which remain unexercised at the effective time of the Transaction, will be exchanged for options exercisable into PDM Shares at the Exchange Ratio.

Support for the Transaction

All directors and senior officers of MTC have entered into support and voting agreements with PDM, pursuant to which they have agreed to vote their MTC Shares, representing approximately 40% of the issued and outstanding MTC Shares, in favour of the Transaction. The board of directors of MTC has unanimously approved the Transaction.

Subject to certain conditions, including obtaining the requisite regulatory approvals, the Transaction is expected to close by the end of April 2023.

Further details of the Transaction are set out in the Arrangement Agreement and will be included in a management information circular of MetalCorp to be mailed in connection with the Meeting (the "Circular"). The Arrangement Agreement and Circular will be made available on SEDAR under the issuer profile of each of PDM and MTC at www.sedar.com.

This press release does not constitute an offer to sell, or the solicitation of an offer to buy, any securities.

Advisors and Counsel
Bennett Jones LLP is acting as Palladium One's legal advisor. Dickinson Wright LLP is acting as MetalCorp's legal advisor.

Qualified Person
The technical information in this release has been reviewed and verified by Neil Pettigrew, M.Sc., P. Geo., Vice President of Exploration and a director of Palladium One and a Qualified Person as defined by National Instrument 43-101.

About Palladium One
Palladium One Mining Inc. (TSXV: PDM) is focused on discovering environmentally and socially conscious Metals for Green Transportation.

A Canadian mineral exploration and development company, Palladium One is targeting district scale, platinum-group-element (PGE)-copper-nickel deposits in Canada and Finland. The Lantinen Koillismaa (LK) Project in north-central Finland, is a PGE-copper-nickel project that has existing NI43-101 Mineral Resources, while both the Tyko and Canalask high-grade nickel-copper projects are located in Ontario and the Yukon, Canada, respectively.

Follow Palladium One on LinkedIn, Twitter, and at www.palladiumoneinc.com.

About MetalCorp
MetalCorp is a mineral exploration company based in Thunder Bay, Ontario, with gold and base metal projects in the Canadian Shield of Northern Ontario, Canada, one of the most prolific mineral districts in the world. To find out more about MetalCorp visit its website at www.metalcorp.ca.