Mr. Vincent Metcalfe reports

FALCO ANNOUNCES A MEMORANDUM OF UNDERSTANDING WITH COMMISSION SCOLAIRE DE ROUYN-NORANDA

Falco Resources Ltd. has signed a memorandum of understanding with the Commission scolaire de Rouyn-Noranda to acquire a building (Pavillon Quemont) located on the site of the Horne 5 project. The acquisition is one of the essential and prerequisite steps in the dewatering and development phase of the Horne 5 project.

The council of commissioners of the Commission scolaire de Rouyn-Noranda and Falco's board of directors have approved the memorandum of understanding regarding the relocation program for all Pavillon Quemont activities.

The memorandum of understanding confirms that Falco will own the building that bears the name Pavillon Quemont upon delivery of the relocation project. The Pavillon's training and labour market integration activities will soon be provided at Complexe La Source-Polymetier. Falco will fully finance and conduct the expansion of the complex to accommodate the new activities. The agreement also includes moving Ateliers Manutex, a social economy enterprise, into the complex.

Relocation and construction costs are estimated at $22.5-million. The work will commence in fall 2017, following the reception of required permits and authorizations. Falco will be the prime contractor.

Daniel Candem, chair of the council of commissioners of the Commission scolaire de Rouyn-Noranda, declared: "This is a successful conclusion for our students and the staff of Pavillon Quemont, who are now able to team up with the services offered by the Complexe La Source-Polymetier in an environment that fosters learning and innovation. I am equally certain that the Commission scolaire de Rouyn-Noranda and Falco Resources will reach other service agreements to the benefit of our students and future employees of the company."

Helene Piuz, chair of the board of directors of Ateliers Manutex, noted: "This is a wonderful opportunity for us to modernize our facilities and create development opportunities. This agreement aligns with our goals."

Mario Provencher, Mayor of Rouyn-Noranda, commented: "The presence of Falco Resources can already be felt. The project is a $22.5-million investment in the field of education for our municipality. This is very positive news for Rouyn-Noranda."

Luc Lessard, president and chief executive officer of Falco, added: "We are very pleased with the discussions we held with all stakeholders. This agreement clearly demonstrates our ability to create major projects in Rouyn-Noranda and our genuine interest in the education and quality of life for the people of our host community. The Horne 5 project meets all economic, social and environmental development criterias."

TRAME, an architect firm, and SNC-Lavalin Stavibel Inc., an engineering firm, both of Rouyn-Noranda, are the professional firms retained for the engineering and supervision work.

About Falco Resources Ltd.

Falco is one of the largest mineral claimholders in the province of Quebec, with extensive landholdings in the Abitibi greenstone belt. Falco owns 68,600 hectares of land in the Rouyn-Noranda mining camp, which represents 70 per cent of the entire camp and includes 13 former gold and base metal mine sites. Falco's principal property is the Horne 5 project located in the former Horne mine that was operated by Noranda from 1927 to 1976 and produced 11.6 million ounces of gold and 2.5 billion pounds of copper. Osisko Gold Royalties Ltd. is the largest shareholder of the company and currently owns 13.3 per cent of the outstanding shares of the company.

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