RJK EXPLORATIONS ANNOUNCES INITIAL CLOSING OF PREVIOUSLY ANNOUNCED NON-BROKERED PRIVATE PLACEMENT

Kirkland Lake, Ontario – (December 23, 2019) – RJK Explorations Ltd. (“RJK” or the “Company”) (TSXV: RJX.A) is pleased to announce that, further to its press release dated November 13, 2019, it has closed the first tranche of the non-brokered private placement offering (the “Class C Offering”) of units (“Units”) and the entirety of the concurrent non-brokered private placement offering (the “FT Offering”) of flow-through units (“FT Units”).  Pursuant to this initial closing, the Company raised a total of $850,000 for the issuance of 5,600,000 Units of the Company at a price of $0.125 per Unit and 1,200,000 FT Units at a price of $0.125 per FT Unit (the “Initial Closing”).

Each Unit consists of one convertible Series 1 Class C Preference Share (a “Royalty Share”), and one share purchase warrant (a “Warrant”) exercisable for one Class A Subordinate Voting Share of the Company (a “Class A Share”). The purchasers of the Units (the “Royalty Share Purchasers”) have all entered into an agreement with the Company dated effective as of the Initial Closing (the “Royalty Shareholders Agreement”) pursuant to which the Company has granted the Royalty Share Purchasers the option to purchase a 2.5% gross overriding royalty on the Company’s Bishop claims subject to the publication by the Company of a “bankable” feasibility study on the Bishop claims.  Pursuant to the terms of the Royalty Shares and the Royalty Shareholders Agreement, the Royalty Shares  include a voluntary conversion right with 25% of each Royalty Share Purchaser’s Royalty Shares being convertible into Class A Shares beginning six (6) months after the Initial Closing, an additional 25% being convertible into Class A Shares beginning twelve (12) months after the Initial Closing, an additional 25% being convertible into Class A Shares beginning eighteen (18) months after the Initial Closing and the remaining 25%  being convertible into Class A Shares beginning twenty-four (24) months after the Initial Closing.  The voluntary conversion period for all Royalty Shares ends five (5) years after the Initial Closing.  Each Royalty Share shall be a voting share.

Each FT Unit consists of one Class A Share issued on a “flow-through” basis (an “FT Share”) and one Warrant.

Each Warrant entitles the holder to acquire one Class A Share at an exercise price of $0.20 for up to 12 months following the Initial Closing. The term of the Warrants may be accelerated in the event that the issuer’s shares trade at or above a price of $0.25 cents per share for a period of 10 consecutive days. In such case of accelerated Warrants, the Company may give notice, in writing or by way of news release, to the subscribers that the Warrants will expire 60 days from the date of providing such notice.

The FT Shares will qualify as “flow-through shares” (within the meaning of the Income Tax Act (Canada)). The gross proceeds of the FT Offering raised from the sale of FT Shares will be primarily used to incur qualifying Canadian Exploration Expenses (the “Qualifying Expenses”) on the diamond exploration in the Cobalt area. The Qualifying Expenses are to be incurred by no later than December 31, 2020 for renunciation to investors of FT Units in the FT Offering effective December 31, 2019. Net proceeds from the Class C Offering will be used for diamond exploration in the Cobalt area as well as general corporate purposes.

In connection with the Initial Closing, the Company paid a finder’s fee to National Bank Financial, an arm’s length finder, consisting in the aggregate of $5,000 in cash.  All securities issued pursuant to both the Class C Offering and the FT Offering (collectively, the “Offering”)are subject to a statutory hold period ending April 24, 2020.  Additional terms of the Offering can be found in the press release of the Company dated November 13, 2019.  The Offering remains subject to final acceptance by the TSX Venture Exchange.

The purchase of FT Units pursuant to the Offering by Glenn Kasner, the President, Chief Executive Officer, and a director of the Company, Amanda Kasner, the Chief Financial Officer and a director of the Company, and Robert Mackay, a director of  the Company (collectively, the “Related Parties”) constituted a “related party transaction” as such term is defined by Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”). The Company was exempt from the MI 61-101 valuation and minority approval requirements for related party transactions in connection with the Offering because the Company was not listed on a stock exchange specified in section 5.5(b) of MI 61-101, and neither the fair market value of the FT Units purchased by the Related Parties, nor the proceeds to be received by the Company in respect of the Related Parties’ participation in the Offering, exceeded $2,500,000.  The material change report is being filed less than 21 days before the closing of the Offering as the extent of related party participation remained unknown until the date of the Initial Closing.

The securities offered pursuant to the Offering have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons absent registration or an applicable exemption from the registration requirements. This news release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

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

Forward Looking Information

Certain statements herein may contain forward-looking statements and forward-looking information within the meaning of applicable securities laws. Forward-looking statements or information appear in a number of places and can be identified by the use of words 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 statements that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. Forward-looking statements and information include statements regarding the Offering generally, the proposed use of proceeds, the ability of the Company to close additional tranches of the Offering and the Company’s exploration plans. With respect to forward-looking statements and information contained herein, we have made numerous assumptions, including assumptions about the receipt of final acceptance by the TSX Venture Exchange and the state of the equity markets. Such forward-looking statements and information are subject to risks, uncertainties and other factors which may cause the Company’s actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statement or information. Such risks include the ability of the Company to receive final acceptance of the Offering, the ability of the Company to close additional tranches, the ability to conduct our exploration programs as planned, the ability to spend the proceeds of the flow-through financing by December 31, 2020, and that the expenditure of the proceeds of the FT Shares will not be considered Qualifying Expenses, changes in equity markets, share price volatility, volatility of global and local economic climate, diamond price volatility, increases in costs, exchange rate fluctuations, speculative nature of diamond exploration and other risks involved in the diamond exploration industry. See the Company’s annual and quarterly financial statements and management’s discussion and analysis for additional information on risks and uncertainties relating to the forward- looking statement and information. There can be no assurance that a forward-looking statement or information referenced herein will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements or information. Also, many of the factors are beyond the control of the Company. Accordingly, readers should not place undue reliance on forward-looking statements or information. We undertake no obligation to reissue or update any forward-looking statements or information except as required by law. All forward-looking statements and information herein are qualified by this cautionary statement.

Contact Information

Glenn Kasner, President
Telephone: (705) 568-7956
Mobile:        (705) 568-7567
info@rjkexplorations.com

Web Site: https://www.rjkexplorations.com