New Break Announces Private Placement and Early Warning Notice

Toronto, Ontario–(Newsfile Corp. – July 12, 2024) – New Break Resources Ltd. (CSE: NBRK) (“New break” or the “Business“) announces its intention to close a non-brokered private placement with a shareholder of more than 10%, on July 18, 2024 (the “Offer“). The Offering consists of the sale of 1,500,000 flow-through units (“FT Units“) at a price of $0.11 per FT unit, for gross proceeds of $165,000.

Each FT Unit consists of one common share that will be designated as a “flow-through share” (within the meaning of subsection 66(15) of the Income Tax Act (Canada)) (a “FT Share“) and one common share purchase warrant, each warrant entitling the holder thereof to purchase one additional non-flow-through common share of the Company at a price of $0.25 until July 18, 2029. The warrants are subject to an acceleration clause, whereby if the closing price of the Company’s common shares on the Canadian Securities Exchange (the “CSE“) is equal to $0.40 or more for five non-consecutive trading days within a 365-day period, the Company may accelerate the expiration of the warrants to a date that is 20 business days from the date of issuance of a press release by the Company announcing the exercise of the acceleration right.

The gross proceeds from the sale of the FT Units will be used for Canadian exploration expenses (“EEC“) and will qualify as “specified mining expenditures” within the meaning of the Income Tax Act (Canada). More specifically, it is expected that these proceeds will be used to finance a planned induced polarization (“Intellectual property“) over the entire interpreted extent of the syenite intrusion on the Company’s Moray property, located approximately 49 km south of Timmins, Ontario and 32 km northwest of the Young-Davidson gold mine operated by Alamos Gold Inc. No finder’s fee will be paid in connection with the closing of the offering.

All securities issued pursuant to this private placement are subject to a statutory hold period of four months and one day expiring four months and one day after closing, in accordance with applicable Canadian securities laws. Completion of the financing is subject to certain conditions, including the receipt of all required regulatory approvals, including final approval of the CSE.

All shares are acquired by John Ross and Patricia Quigley, a shareholder with more than 10% (the “Related party” and the “Purchaser“). This issuance of securities constitutes a “related party transaction” within the meaning of Regulation 61-101 respecting Protection of Minority Security Holders in Special Transactions (“Regulation 61-101”). The Company is relying on an exemption from the formal valuation and minority shareholder approval requirements of Regulation 61-101 in accordance with section 5.5(a) and section 5.7(1)(a) of Regulation 61-101, on the basis that the issuance of securities does not exceed 25% of the fair market value of the Company’s market capitalization.

The securities offered have not been and will not be registered in the United States. Securities Act of 1933as 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 press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of securities in any state in which such offer, solicitation or sale would be unlawful.

Early warning notice regarding holders of securities greater than 10%

In connection with the expected closing of the Offer on July 18, 2024, the Purchaser will acquire a total of 1,500,000 ordinary shares in the capital of the Company (“Actions“) and 1,500,000 stock subscription warrants (“Mandates“) (THE “Acquisition“). Each warrant entitles its holder to acquire one share under the conditions more specifically set forth above. Prior to the acquisition, the acquirer held or exercised control or direction over 6,846,800 shares, 1,548,000 warrants and 240,000 stock options (“Options“), representing 13.81% and 16.81% of the outstanding shares of the Company on an undiluted and partially diluted basis, respectively. Following completion of the Acquisition, the Acquirer will beneficially own or exercise control or direction over 8,346,800 Shares, 3,048,000 Warrants and 240,000 Options, representing 16.75% and 21.91% of the outstanding shares of the Company on an undiluted and partially diluted basis, respectively.

To meet the requirements of Canadian Standard 62-104 – Public purchase offers and public repurchase offers and Canadian Standard 62-103 – The Early Warning System and Related Issues Related to Takeover Bids and Insider Reportingan early warning report regarding the acquisition of securities by the Acquirer will be filed under the Company’s SEDAR+ profile at www.sedarplus.ca, following the closing. To obtain a copy of the Company’s filed early warning report, please contact Michael Farrant at (416) 278-4149 or visit SEDAR+ under New Break’s issuer profile.

The Acquisition was made for investment purposes. Depending on market and other conditions, the Acquiror may, from time to time, increase or decrease the ownership, control or direction of the securities of the Company, through market transactions, private agreements or otherwise.

About New Break Resources Ltd.

New Break is a Canadian mineral exploration company with a dual vision of value creation. In Northern Ontario, New Break is focused on its Moray project, in a well-established mining camp, close to existing infrastructure, while at the same time, through our prospective land holdings in Nunavut which include the Sundog and Esker gold properties, we provide our shareholders with significant exposure to the vast potential for exploration success in one of Canada’s most promising gold exploration and production regions. New Break is supported by a highly experienced team of mining professionals who are committed to environmental, social and corporate governance. Information about New Break is available under the Company’s profile on SEDAR+ at www.sedarplus.ca and on the Company’s website at www.newbreakresources.ca. New Break began trading on the Canadian Securities Exchange (www.thecse.com) on September 7, 2022 under the symbol (CSE: NBRK).

For more information about New Break, please visit www.newbreakresources.ca or contact:

Michael Farrant, President and CEO
Tel.: 416-278-4149
Email: [email protected]

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No stock exchange, regulated securities provider, securities commission or other regulatory authority has approved or disapproved the information contained in this press release.

DISCLAIMER REGARDING FORWARD-LOOKING INFORMATION

Except for statements of historical fact, this press release contains certain “forward-looking information” within the meaning of applicable securities laws. Forward-looking information is often characterized by words such as “plan”, “expect”, “project”, “intend”, “believe”, “anticipate”, “estimate” and other similar words, or statements that certain events or conditions “may” or “will” occur. Forward-looking statements are based on the opinions and estimates as of the date they are made and are subject to various risks, uncertainties and other factors that could cause actual events or results to differ materially from those anticipated in the forward-looking statements, including, but not limited to, receipt of regulatory and stock exchange approvals, granting of equity compensation, waiver of flow-through exploration expenditures, ownership arrangements, timing and content of future work programs, geological interpretations, receipt of title to properties, failure to predict and counteract the effects of global events on the Company’s business, including, but not limited to, effects on commodity prices, capital market conditions, restrictions on labor and international travel and supply chains, etc. Forward-looking information addresses future events and conditions and therefore involves inherent risks and uncertainties, including factors beyond the Company’s control. Accordingly, readers should not place undue reliance on forward-looking information. The Company undertakes no obligation to update publicly or otherwise any forward-looking information, except as required by law. Additional information identifying risks and uncertainties that may affect financial results is contained in the Company’s financial statements and management’s discussion and analysis (the “Filings”), which are available upon request.

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