Eureka Completes Private Placement of Subscription Receipts

Eureka Resources, Inc. (“Eureka” or the “Company”) is pleased to announce that the Company has closed its previously announced brokered private placement offering of subscription receipts (each, a “Subscription Receipt”) pursuant to which the Company issued an aggregate of 39,000,000 Subscription Receipts at a price of $0.05 per Subscription Receipt for gross proceeds of $1,950,000 (the “Offering”), which, when combined with funds advanced to the Company by Kore Mining Inc. (“Kore”), will result in an aggregate of $2,200,000 being available to the Company upon completion of the previously announced reverse takeover of the Company by Kore (the “Transaction”), as further described below. PI Financial Corp. (the “Agent”) acted as agent for the Offering.

The Offering is the concurrent financing in connection with the Transaction. As previously announced, prior to the completion of the Transaction, Eureka expects to complete a consolidation of its outstanding common shares (each, a “Share”) pursuant to which it will issue one post-consolidation Share for each ten pre-consolidation Shares (the “Consolidation”). The number of units of the Company (each, a “Unit”) underlying the Subscription Receipts will be adjusted to reflect the Consolidation, such that it is expected that an aggregate of 4,400,000 Units will be issued on conversion of the Subscription Receipts and Debentures (as defined below) at a deemed issuance price of $0.50 per Unit.

The gross proceeds of the Offering (the “Escrowed Funds”) have been deposited into escrow with Computershare Trust Company of Canada as escrow agent (the “Escrow Agent”), pursuant to the terms of a subscription receipt agreement dated October 22, 2018 (the “Subscription Receipt Agreement”) among the Company, the Escrow Agent and the Agent, pending satisfaction of the Escrow Release Conditions (as defined in the Subscription Receipt Agreement), which include that all conditions precedent to the closing of the Transaction, other than the filing of articles of amalgamation, be satisfied or waived.

Upon the satisfaction or waiver of the Escrow Release Conditions, each Subscription Receipt will automatically convert, for no additional consideration, into one Unit (on a post-Consolidation basis), provided that the Escrow Release Conditions are satisfied prior to November 1, 2018 (or such later date as may be agreed to by Eureka, Kore and the Agent) (in any case, the “Outside Date”), and provided that the Transaction has not otherwise been terminated. Each Unit will consist of one Share and one-half of one common share purchase warrant (with each whole warrant being, a “Warrant”). Each Warrant will entitle the holder to acquire one Share for a period of 24 months from the date of issuance thereof at a price of $0.75 per Share on a post-Consolidation basis.

Expiry of the Warrants will be subject to acceleration if, following the issuance of the Warrants, the closing price of the Shares on the TSX Venture Exchange (the “TSXV”), or such other Canadian stock exchange on which the Shares are then principally traded, equals or exceeds $1.00 per Share, on a post-Consolidation basis, for a period of ten consecutive trading days. In that case, the Company may accelerate the expiry date of the Warrants to 30 calendar days from the date notice is given by the Company, by way of dissemination of a news release, to the holders of the Warrants.

The Escrowed Funds are being held in escrow pending satisfaction of the Escrow Release Conditions at which point the net proceeds will be delivered by the Escrow Agent to the Company. If the Escrow Release Conditions are not satisfied by the Outside Date, the Escrowed Funds will be returned to the subscribers.

In connection with the Offering, the Company has agreed to: (i) pay the Agent a cash commission equal to 7% of: (a) the aggregate gross proceeds of the Subscription Receipts sold pursuant to the Offering, and (b) the aggregate gross proceeds from the sale of the Debentures, and (ii) issue the Agent warrants, each of which will entitle the holder to acquire one Unit (on a post-Consolidation basis) at a price of $0.50 per Unit, as is equal to 7% of: (a) the total number of Subscription Receipts sold under the Offering, and (b) the total number of Units to be issued on conversion of the Debentures, for a period of 24 months from the date of issuance. The Agent was reimbursed for its reasonable expenses in connection with the Offering.

All securities issued in connection with the Offering (including the Units and underlying Shares and Warrants), are subject to a statutory hold period of four months and one day, and such other hold periods as are required under applicable securities laws.

Concurrent Private Placement by Kore

Kore has completed a private placement of convertible debentures (each, a “Debenture”) in the aggregate principal amount of $250,000 that, in accordance with their terms, will convert into Units concurrently with the conversion of the Subscription Receipts, on the basis of one Unit for each $0.50 principal amount.The proceeds of the offering of the Debentures have been advanced by Kore to the Company.

About Eureka

Eureka is a mineral exploration company based in Vancouver, British Columbia.

British Columbia, Canada

Eureka’s 100% owned FG Gold property is an advanced-stage gold project located in the Cariboo Mining Division. Historical exploration has established a Measured and Indicated (376,000 ounces) gold resource at an average grade of 0.776 g/t gold, using a cut-off grade of 0.5 g/t, and an Inferred gold resource (634,900 ounces) at an average grade of 0.718 g/t gold, using a cut-off grade of 0.5 g/t. Details of the gold resource can be found in “NI 43-101 Technical Report, Frasergold Exploration Project, Cariboo Mining Division, dated July 27, 2015” available under the Company’s profile on SEDAR or on the Company’s website.

Eureka has a 100% interest in the Gold Creek property located in the Cariboo Mining Division. Gold Creek is a grassroots gold project neighbouring, and with similar geology to the Spanish Mountain deposit owned by Spanish Mountain Gold Ltd.

Yukon Territory, Canada

Eureka’s 100% owned Luxor property consists of three non-contiguous claim blocks totalling 360 mining claims.Luxor is located in the Dawson Range Gold Belt, a district of major porphyry, breccia and vein occurrences. Eureka’s 100% owned TAK property is also located in the Dawson Range Gold Belt and consists of 82 mining claims.

Neighbouring projects include Goldcorp’s Coffee project and White Gold’s White Gold project.

Nevada, USA

Eureka owns a 50% interest in the Gemini lithium brine project located approximately 40 kilometres (26 miles) south of North America’s only producing lithium mine at Silver Peak, Nevada.

Technical information with respect to Eureka contained in this news release has been reviewed and approved by Kristian Whitehead, P.Geo., the Company’s designated Qualified Person within the meaning of National Instrument 43-101.

About KORE

KORE is a development stage company that offers exposure to precious metals exploration and development in North America, with a corporate strategy focused on the advancement of its California development and British Columbia advanced exploration stage projects.

California, USA

KORE, indirectly through wholly-owned subsidiaries, owns 100% interests in the Imperial and Long Valley gold development projects, located in California, USA (together, the “Projects”). Combined, most recent current and historical estimates of resources specify a total of 2,126,000 measured and indicated and 1,784,000 inferred gold ounces. A Qualified Person has not done sufficient work to classify the historical estimates as current resources and KORE is not treating the historical estimates as current resources. Significant data compilation, re-drilling, re-sampling and data verification may be required by a Qualified Person before the historical estimates at the Projects can be classified as current resources. KORE has no other material financial assets or liabilities.

Each of the Projects has the potential to host near-surface, open pit, heap leachable gold deposits. The Projects combine low technical risk, high advancement potential and a low initial cost.

Kore was incorporated under the provisions of the Business Corporations Act (British Columbia) on February 22, 2016. There are currently 18,707,202 Kore common shares issued and outstanding.

This news release does not constitute an offer to sell or a solicitation of an offer to sell any Eureka common shares in the United States. The Eureka common shares to be issued in connection with the Transaction have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), or any state securities laws and may not be offered or sold within the United States or to U.S. persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

Further information on Eureka can be found on the Company’s website at www.eurekaresourcesinc.com and at www.sedar.com, or by contacting Michael Sweatman, President and CEO, by email at info@eurekaresourcesinc.com or by telephone at (604) 449-2273.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of TSX Venture Exchange) accepts responsibility for the adequacy of accuracy of this release.

Cautionary Statement Regarding Adjacent Properties and Forward-Looking Information

Completion of the Transaction is subject to a number of conditions, including but not limited to, TSXV acceptance. Where applicable, the Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Transaction will be completed as proposed or at all.

Investors are cautioned that any information released or received with respect to the Transaction may not be accurate or complete and should not be relied upon.

The TSXV has in no way passed upon the merits of the Transaction and has neither approved nor disapproved the contents of this news release.

All information contained in this news release with respect to Eureka and Kore was supplied by the parties, respectively, for inclusion herein, and Eureka and its directors and officers have relied on Kore for any information concerning such party, including information concerning the Projects.

This news release contains forward-looking statements relating to the timing and completion of the Transaction, the future operations of the Company, Kore, and the issuer resulting from the Transaction (the “Resulting Issuer”) and other statements that are not historical facts. Forward-looking statements are often identified by terms such as “will”, “may”, “should”, “anticipate”, “expects” and similar expressions. All statements other than statements of historical fact, included in this release, including, without limitation, statements regarding the Transaction and the future plans and objectives of the Company, Kore, and the Resulting Issuer are forward-looking statements that involve risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from the Company’s, Kore’s, and the Resulting Issuer’s expectations include the failure to satisfy the conditions to completion of the Transaction set forth above and other risks detailed from time to time in the filings made by the Company, Kore, and the Resulting Issuer with securities regulations.

The reader is cautioned that assumptions used in the preparation of any forward-looking information may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted, as a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of the Company, Kore, and the Resulting Issuer. As a result, the Company, Kore, and the Resulting Issuer cannot guarantee that the Transaction will be completed on the terms and within the time disclosed herein or at all. The reader is cautioned not to place undue reliance on any forward-looking information. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this news release are expressly qualified by this cautionary statement. The forward-looking statements contained in this news release are made as of the date of this news release and the Company, Kore, and the Resulting Issuer will update or revise publicly any of the included forward-looking statements as expressly required by Canadian securities law.

Source: www.eurekaresourcesinc.com