Mr. Chris Grove reports

COMMERCE RESOURCES CORP. ANNOUNCES CLOSING OF FIRST TRANCHE OF PRIVATE PLACEMENT AND CONSULTING AGREEMENT WITH ZIMTU CAPITAL CORP.

Commerce Resources Corp., further to its news release dated Oct. 4, 2019, has closed a first tranche of the non-brokered private placement financing of up to 11,538,461 units at a price of 26 cents per unit for gross proceeds of up to $3-million.

The first tranche consisted of 9,028,000 units of the company for gross proceeds of $2,347,280. Each unit consists of one common share of the company at a price of 26 cents and one common share purchase warrant, with each warrant entitling the holder to purchase one share at a price of 35 cents per share for the first year and 50 cents for the second year following the closing of the offering.

For the first tranche, the company paid cash finders' fees of $9,646 to certain finders.

Completion of subsequent tranches of the financing is subject to a number of conditions, including, without limitation, receipt of all regulatory approvals, including approval of the TSX Venture Exchange.

All securities issued in the first tranche and the shares that may be issuable on exercise of the warrants are subject to a statutory hold period expiring Feb. 12, 2020.

David Hodge, the chief executive officer and a director of the company, was issued 190,000 units under the first tranche; Zimtu Capital Corp., a public company of which Mr. Hodge and Chris Grove, directors and officers of the company, are directors of, was issued 5,061,500 units under the first tranche, and Dahrouge Geological Consulting Ltd., a private company owned by Jody Dahrouge, a director of the company, was issued 1,308,000 units under the first tranche, all of which constitute a related party transaction within the meaning of Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions. The issuances to the insiders are exempt from the valuation requirement of MI 61-101 by virtue of the exemption contained in Section 5.5(b) as the company's shares are not listed on a specified market and from the minority shareholder approval requirements of MI 61-101 by virtue of the exemption contained in Section 5.7(a) of MI 61-101 in that the fair market value of the consideration of the securities issued to the related parties did not exceed 25 per cent of the company's market capitalization.

The company also entered into a consulting agreement with Zimtu Capital, whereby the consultant will provide certain investor relations and consulting services to the company. In consideration for the services, the company has agreed to pay the consultant a fee of $8,333.33 per month, payable in advance for the initial 12-month term. The agreement may be extended by mutual agreement between the parties.

About Commerce Resources Corp.

Commerce Resources is an exploration and development company with a particular focus on deposits of rare metals and rare earth elements. The company is focused on the development of its Ashram rare earth element deposit in Quebec and the Upper Fir tantalum-niobium deposit in British Columbia.

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