Mr. Charles Entrekin reports

MELIOR RESOURCES INC. ANNOUNCES PROPOSED ACQUISITION OF 100% OF BELRIDGE ENTERPRISES PTY LTD AND CHANGE OF BUSINESS

Melior Resources Inc. has entered into a share sale and purchase agreement dated as of March 31, 2014, with respect to the acquisition of 100 per cent of the issued and outstanding shares of Belridge Enterprises Pty. Ltd. Belridge is an Australian incorporated company which owns the Goondicum ilmenite project located in Queensland, Australia. The proposed transaction will constitute a change of business transaction of the corporation in accordance with Policy 5.2 of the exchange.

A presentation detailing the proposed transaction can be found on Melior's website.

Highlights

Transaction:

• 100-per-cent all-share acquisition of Belridge;
• Melior to issue 38.1 million shares at closing representing 18.0 per cent of the corporation on a pro forma basis;
• Residual earn-out payment of up to an additional 38.1 million shares due on achievement of certain predetermined share price levels significantly in excess of Melior's current share price;
• Melior to invest up to $15-million (U.S.) in the restart of the operation.

Goondicum project:

• High-quality ilmenite and apatite (phosphate rock) project, well positioned to leverage growing demand for titanium dioxide, as well as benefit from increasing agricultural demand for fertilizers;
• Resource base of 1.9 million tonnes of indicated and 1.93 million tonnes of inferred in situ ilmenite resources with significant opportunities to grow the resource base further through near-mine exploration;
• Formerly operating project, currently on care and maintenance, expected to allow for quick and cost-effective restart;
• In excess of $120-million (Australian) of historical invested capital previously spent on infrastructure and process plant equipment;
• Project is strategically located in Australia, close to high-growth Asian markets;
• High-quality ilmenite product well understood and accepted by customers, with over 61,000 tonnes having been previously supplied to customers;
• Project provides Melior a unique and relatively low-risk opportunity to become a mid-sized producer of quality ilmenite;
• Successful restart of Goondicum will provide a strong platform allowing consideration of further growth opportunities.

Board

• Melior board of directors reconstituted to provide significant operational and commodity-specific experience to support Melior in its development of the Goondicum project;
• Mark McCauley, the managing director of Belridge, will assume the role of chief executive officer of Melior upon closing of the proposed transaction;
• Overall board compensation has been reviewed and revised downward by over 30 per cent.

Commenting on the transaction and new board, Charles Entrekin, chairman, said: "We are delighted to have reached an agreement with the Belridge shareholders to acquire this high-quality and near-production project. This project, when back in production, will provide Melior with a solid platform for further growth. I welcome Joe, Glenn, Martyn and Mark to the board, and believe their combined expertise will be invaluable as we move towards the restart of the Goondicum operation."

Overview of the Goondicum project

The Goondicum project is a brownfield ilmenite project located in central Queensland, Australia, 30 kilometres due east of the township of Monto. The project, currently on care and maintenance, benefits from significant historical investment of over $120-million (Australian) on infrastructure and processing equipment, expected to allow for a cost-efficient restart of the operations (the $120-million (Australian) historical investment is based on information with respect to the book value of its assets and historical transactions provided by Belridge, and has not been audited). Further, the Goondicum orebody is well understood due to a history of exploration and resource evaluation activities.

The Goondicum project is located within the Goondicum crater, a topographic feature roughly circular and six kilometres in diameter containing significant ilmenite, apatite (phosphate rock), titano-magnetite and feldspar mineralization. The project comprises a mining lease (ML80044) which covers approximately 20 per cent of the Goondicum crater and exploration leases covering the remainder of the crater, providing significant opportunity for resource and mine life extension.

Current mineral resources for the project, reported at a cut-off grade of 2.5 per cent available ilmenite, are estimated at 31.3 million tonnes of indicated resource and 30.9 million tonnes of inferred resource providing 1.90 million and 1.93 million tonnes respectively of in situ ilmenite.

                   RESOURCE ESTIMATES FOR THE GOONDICUM ILMENITE DEPOSIT 

           Tonnes     Available      Available    Recoverable    Recoverable
Category      (Mt)  ilmenite (%)  ilmenite (Mt)   ilmenite (%)  ilmenite (Mt)  Slimes (%)

Indicated    31.3           6.1           1.90            4.9           1.52        22.9     
Inferred     30.9           6.3           1.93            5.0           1.55        24.3     

Mineralization is planned to be mined via basic open-pit excavations using scrapers, excavators and trucks. The mineralization is present from surface and there is no requirement for any overburden removal or for blasting or ripping of the resource.

The mineralization will be trucked to a centrally located process plant for extraction of ilmenite and apatite. As part of the project restart, it is envisaged the process plant will be upgraded from a nominal capacity of 1.8 million tonnes of mineral feed per year to approximately 2.8 million tonnes per year, lowering the operating cost structure significantly. Management believes that there is scope to further increase this level through a relatively low-cost upgrade of key processing equipment once the plant is back in operation.

The process plant employs conventional mineral sands upgrading processes including scrubbers, screens, cyclones, wet magnets and gravity spirals. Magnetic separation is then used to separate ilmenite from other byproduct materials.

The ilmenite product was previously hauled 260 kilometres from the mine site to the port of Gladstone where it was shipped around the world to various customers. There is potential to reduce this haulage distance from 260 kilometres down to 160 kilometres with the construction of a new 22-kilometre mine access road, lowering off-site logistics costs significantly. Further evaluation of this cost-saving opportunity will be conducted during the mine restart process.

The project has historically sold over 61,000 tonnes of ilmenite product to pigment customers and management believes the product's performance is well understood and accepted in the market. A National Instrument 43-101-compliant technical report has been prepared and will be filed by Melior on SEDAR within the next 45 days.

Overview of ilmenite and titanium dioxide (TiO2)

Ilmenite is a titanium dioxide mineral which is used primarily in the production of pigments for paints, coatings, plastics, inks and other products. TiO2 feedstocks are used in the pigment production process due to its ability to impart brightness, opacity, strength and durability to the pigment. Management believes that TiO2 feedstocks face limited risk from substitution as there are few viable feedstock alternatives which produce pigment of equivalent quality.

The proposed transaction

The share purchase agreement provides that Melior Australia Pty. Ltd., a direct subsidiary of Melior, will acquire 100 per cent of the issued share capital of Belridge in exchange for the issuance by Melior of 38,087,971 common shares of Melior to Belmont Park-Monto Pty. Ltd. (48.68 per cent), Panorama Ridge-Monto Pty. Ltd. (48.68 per cent) and Sashimi Investments Pty. Ltd. (2.62 per cent), in each case in their capacity as trustees. Each Belridge shareholder is a company formed in Australia. The consideration shares would represent 18.0 per cent of Melior's issued and outstanding shares immediately after closing of the proposed transaction. Closing of the proposed transaction is subject to exchange approval and other customary conditions. Melior expects closing to occur within the next four to six weeks.

Melior would commit to invest up to $15-million (U.S.) in the Goondicum project, subject to the satisfaction of all applicable legal and regulatory requirements and fulfilment of all permitting, approval and licensing requirements necessary to successfully achieve a full restart of the Goondicum project. Melior's board of directors would direct and have ultimate approval over the total amount invested and the drawdowns and conditions for the expenditure of these funds.

Following closing, the Belridge shareholders would be entitled to receive an earn-out payment, payable in Melior common shares (or, at Melior's election, in cash) based on the performance of Melior by reference to its share price. The parties have agreed to predetermined earn-out payment amounts should Melior's share price reach predetermined levels with such predetermined levels being well in excess of the market price of Melior's common shares as of the effective date of the share purchase agreement. The maximum number of Melior common shares that could be issued as payment for the earn-out consideration is 38,087,971. The earn-out consideration will be available for a period of four years from the date of closing.

Change of control during the validity period

If a change of control event (as defined below) occurs during the validity period and the price at which the Melior common shares are trading exceeds specified levels above the current market price, the Belridge shareholders would have a right to receive the earn-out consideration on a pro rata basis.

No change of control during the validity period

In the event that no change of control event occurs during the validity period, the Belridge shareholders would, at the end of the validity period, be entitled to receive the earn-out consideration, on a pro rata basis, if the trading price of the Melior common shares exceeds specified levels above the current market price.

A change of control event is defined as any party or parties acting in concert, other than Pala Investments Ltd. (Melior's current majority shareholder), acquiring more than 50.0 per cent of the fully diluted common shares of Melior. The payment of the earn-out consideration would be subject to the satisfaction of customary eligibility and performance conditions including the continuation of operations of the Goondicum project and the Belridge shareholders continuing to hold all the consideration shares. For example, assuming that no change of control occurs during the validity period, the earn-out consideration payable at the end of the validity period will range from zero (if the Melior share price is less than 41 cents per share) to 38.1 million shares if the Melior share price exceeds $1.11 per share.

The consideration shares will be placed in escrow for a period beginning on the date on which closing occurs and ending two years after the closing date. Should Melior have a successful claim against the Belridge shareholders during the escrow period, such claim may be satisfied by cash or by a return of the consideration shares with equivalent value to such claim. Consideration shares returned to Melior are to be valued based on the price of Melior common shares on the closing date.

Following closing, the Belridge shareholders will be entitled to nominate one director to the board of directors of Melior for so long as they together hold at least 10.0 per cent of Melior's issued and outstanding common shares.

Upon completion of the proposed transaction, it is expected that the corporation's listing status will change from that of a Tier 1 investment issuer to a Tier 1 mining issuer.

A finder's fee of $250,000 (Australian) is payable by Melior to a third party on closing of the transaction.

As the proposed transaction is a change of business transaction, pursuant to exchange Policy 5.2, Melior shareholder approval is required. Melior's majority shareholder, Pala Investments, has provided written consent approving the proposed transaction which constitutes the requisite shareholder approval. The proposed transaction will be at arm's length, and accordingly, will not require shareholder approval beyond that described above.

A filing statement in respect of the proposed transaction will be prepared and filed in accordance with Policy 5.2 of the exchange on SEDAR prior to the closing of the proposed transaction. A press release will be issued once the filing statement has been filed as required pursuant to exchange policies.

Sponsorship

The exchange has conditionally waived the sponsorship requirements of exchange Policy 5.2. The corporation expects that a final waiver of the sponsorship requirement will be obtained prior to closing.

Loan arrangement

Pursuant to a loan agreement, Melior has agreed to provide Belridge with short-term financing in an amount of up to $500,000 for operational costs. It is intended that any amounts outstanding after closing will be refinanced in a tax-efficient manner for Melior.

Board of directors

In recognition of the expected transition of Melior from a Tier 1 investment issuer to a Tier 1 mining issuer, the board has been reconstituted with operationally experienced executives who can support and guide the corporation in its next phase of growth as a mining company.

The corporation would like to thank departing directors Remo Mancini, Muneeb Yusuf and Evgenij Iorich for their stewardship of the corporation as an investment issuer, and for their successful identification of both Asian Mineral Resources and the Goondicum project investment opportunities.

Commenting on the transaction, Mr. Mancini said: "On behalf of Muneeb Yusuf, Evgenij Iorich and myself, I would like to say how pleased we are with the Belridge acquisition. The board's mission of transforming Melior from an investment company into a soon to be full-fledged significant operating entity has been successfully achieved and positions Melior well to drive growth in shareholder value."

Melior welcomes Glenn Black, Joe Connolly and Martyn Buttenshaw, who have now joined the board as new directors. It is expected that Mr. McCauley will join the board as a director and become chief executive officer of Melior upon closing of the proposed transaction.

The following are brief descriptions of the directors and officers that will, collectively, bear stewardship and management of the corporation going forward.

Dr. Entrekin has over 35 years of experience in the mining and metals sector and possesses significant public company experience at the executive officer level. He has served as president and chief operating officer of Titanium Metals Corp., a New York Stock Exchange-listed producer of primary titanium and its alloys, as well as president and chief executive officer of Timminco Ltd., a Toronto Stock Exchange-listed magnesium, silicon and aluminum company. Through his career Dr. Entrekin has led and implemented successful restructurings and turnarounds of mining and metals companies in North America and worldwide. Dr. Entrekin holds a BSc from Lehigh University, an MBA from the University of Delaware, and an MSc and PhD from Drexel University. Dr. Entrekin is also a director of Sierra Rutile Ltd., a company listed on the Alternative Investment Market.

Mr. Black is a professional mechanical engineer with over 36 years of experience in senior management and operational roles. A significant portion of his experience has been with De Beers and Anglo American, focusing on project implementation, management and operation for a variety of major projects globally. Mr. Black is currently chief operating officer of Peninsula Energy, an Australian-listed uranium producer with assets in Wyoming and Karoo, South Africa, and Firestone Diamonds, an AIM-listed diamond producer with operations in Lesotho and Botswana. Mr. Black graduated from New College, Durham, England, and received a T4 certificate of mechanical engineering, the Association of Mining Electrical & Mechanical honours certificate and the mechanical engineers certificate from the National Coal Board. Mr. Black also received the government certificate of competency (mechanical) in 1987 in South Africa. Mr. Black completed the executive development program at the Gordon Institute of Business Science in 2004.

Mr. Buttenshaw is currently senior manager with Pala Investments. Mr. Buttenshaw has over 12 years of direct mining experience and is a former senior mining engineer at Rio Tinto Minerals' borax operations, overseeing all aspects of mine planning at its U.S. and international mining operations. Mr. Buttenshaw is currently a director of Sierra Rutile Ltd. and has extensive experience advising Sierra Rutile (a U.K.-listed rutile and ilmenite producer) on strategic mine planning, business improvement and project feasibility studies. Mr. Buttenshaw holds an MBA (with distinction) from the London Business School and an MEng (first class) in mining engineering from the Royal School of Mines, Imperial College, London.

Mr. Connolly is a chartered accountant and experienced finance professional with deep experience in the natural resource sector. Mr. Connolly was formerly the chief financial officer of Sierra Rutile, responsible for strategic business planning, financial reporting, budgeting and compliance. Mr. Connolly is currently co-founder and chief executive officer of Buckthorn Partners Ltd., a financial service advisory business, regulated by the U.K. Financial Conduct Authority. Prior to his role with Sierra Rutile, Mr. Connolly held roles with Clipper Windpower, Morgan Stanley and Deloitte. Mr. Connolly is a chartered accountant and graduated from the University of Cambridge with an MA in natural science.

Thomas Masney -- chief financial officer and corporate secretary

Mr. Masney is an experienced finance professional and is currently the chief financial officer of Melior. Prior to joining Melior in 2012 Mr. Masney was the chief financial officer of Astar Minerals PLC (formerly Pan Pacific Aggregates PLC) which is listed on the London Stock Exchange -- AIM. Mr. Masney has been a chartered accountant since 1980 and has experience in Canada, the United Kingdom and Hong Kong. Mr. Masney graduated from McMaster University in Hamilton, Ont., with a bachelor of commerce.

On closing of the transaction it is proposed that Dr. Entrekin will step down from the role of chief executive officer of Melior and that Mr. McCauley will assume the role of chief executive officer. Dr. Entrekin will remain as a director and chairman of the board of the corporation.

Mr. McCauley is currently managing director of Belridge Enterprises, which has been the owner of the Goondicum project since 2009. Mr. McCauley has substantial mining experience and has been involved in the development of several major mining projects in Australia and Argentina, including turnaround and organizational restructuring. Mr. McCauley was a non-executive director and chairman of the audit committee for Norton Goldfields Ltd. from September, 2007, until June, 2010, during which time he was also managing director for a nine-month period of restructuring. Mr. McCauley served as chief financial officer and company secretary of Felix Resources Ltd., an Australian Securities Exchange-listed coal mining company, from October, 2003, to February, 2007, during which time it went from a market cap of $35-million to a market cap of over $1-billion.

Mr. McCauley has previously been a director of several AIM- and ASX-listed mining and exploration companies. Mr. McCauley completed an advanced management program at Harvard Business School in 2003, holds an MBA from Bond University in Australia (with majors in finance and accounting) and has a bachelor of engineering from the University of Queensland.

Board compensation

The per-year compensation of the board has been reduced to the following basic fees:

Chairman:  $40,000 (U.S.)

Directors:  $20,000 (U.S.)

In addition to the basic fees there will be additional board committee fees of $5,000 (U.S.) for the chairman of each committee and $3,000 (U.S.) for each member of a committee. Total board compensation, including an expansion of the board to include one additional director, is expected to be approximately $150,000 (U.S.) per year, a 33-per-cent reduction on 2013 fees. These fees will be reviewed from time to time by the nomination and corporate governance committee.

Further, a long-term incentive program will be implemented with the board and senior management at an appropriate point.

Conference call

A conference call to discuss this transaction will be held at 12 p.m. ET on March 31, 2014.

The conference call information is as follows:

United States/Canada (toll-free):  1-877-860-3058

United States/Canada:  1-719-867-1571

United Kingdom (toll-free):  0800-358-6403

Australia (toll-free):  1-800-205-565

Passcode:  644472

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