Ms. Glenda Kelly reports

PEDRO RESOURCES ANNOUNCES ACQUISITION OF COLORADO VANADIUM CORP AND THE HISTORIC GRAYSILL VANADIUM MINE

Pedro Resources Ltd. has acquired the Graysill mine property in the Colorado Plateau of Colorado in the United States. The Graysill mine property consists of 40 unpatented lode mining claims with a total area of 800 acres. Historic mining took place on the project through the 1940s and 1950s, with total production of 32,000 tons of mineralized material grading 2.41 per cent V2O5 (vanadium pentoxide) and 0.09 per cent U3O8 (triuranium octoxide). Pedro is working to update the existing 2014 National Instrument 43-101 report on the Graysill property.

This is a significant acquisition which is a reactivation for the company and focusing on the active battery metals space. The company will be seeking listing on the TSX Venture Exchange as a Tier 2 issuer, and the acquisition, financing and reactivation remain subject to the approval of the exchange. There are no changes to company's board of directors and management by this transaction.

The board of directors intends to announce a capital raise of $750,000 in connection with this acquisition to pursue the acquisition costs and exploration program. A news release will be issued at a later date disclosing the terms of the financing.

Highlights:

• The Graysill property is located approximately 15 miles southwest of Silverton, Colo. The property is road accessible by a three-season gravel-and-dirt road which is maintained by the Colorado Forest Service during the summer months.
• Mineralization at Graysill consists of tabular, stratabound vanadium-uranium hosted in the Jurassic-age Entrada sandstone. The Entrada formation outcrops on the south end of the property and dips under cover approximately 10 degrees to the north. Mineralization is localized and strongest in the upper Entrada near the contact with an overlying limestone unit.
• Historic mining took place on the property sporadically from the late 1940s through the early 1950s. Approximately 32,000 short tons of mineralized materials were mined with a reported grade of 2.41 per cent V2O5 and 0.09 per cent U3O8. The 32,000 short tons of mineralized material yielded approximately 1.5 million pounds of V2O5 and 52,000 pounds of U3O8.

Project details

The Graysill property, comprising 40 unpatented lode mining claims covering a total area of 800 acres, is located approximately 15 miles southwest of Silverton, Colo. The property is accessed via the unpaved United States Forest Service Road 578, which takes off eastward from Colorado State Highway 145.

The Graysill deposit was discovered in 1945, through exploratory drilling by the Vanadium Corporation of America. Production began in 1947 and ceased by 1959, producing 32,000 short tons of 2.41 per cent V2O5 and 0.09 per cent U3O8. Follow-up drilling of 33 diamond drill holes was completed by Atlas Minerals Company in the late 1970s through to the early 1980s. The property was purchased by Pacific Metals Corp., which completed three seasons of exploration on the property from 2012 to 2014, culminating with an NI 43-101 technical report.

As a verification exercise for the 2014 NI 43-101 technical report, a grab sample was taken from an area proximal to a historic adit. The sample returned values of 1.36 per cent V2O5 and 0.098 per cent U3O8. The sample was prepared at the Hazen Research Laboratory in Golden, Colo. The sample was crushed to produce a minus-100-mesh pulp. A 0.50-gram sample was analyzed for uranium by ASTM modified standard analysis method D-2907-97. A 0.25-gram representative split was analyzed by standard ICP (inductively coupled plasma) methods for vanadium. Selected samples are not representative of the mineralization hosted on the property.

Project geology

The Graysill vanadium-uranium property is located in the Entrada sandstone along a sinuous trend extending in a north-south direction for over 100 miles. The trend coincides with a major structural feature representing a transitional zone between the Colorado Plateau and the Southern Rocky Mountain physiographic provinces.

The local stratigraphy consists of: the Brushy basin shale member of the Upper Jurassic Morrison formation, consisting of mudstones, sandstones and minor conglomeratic sandstone; the Salt Wash sandstone member of the Upper Jurassic Morrison formation, ranging in thickness from 160 to 450 feet and composed of mudstone and interbedded sandstone; the Upper Jurassic Wanakah formation, reaching a thickness up to 240 feet and composed of fine sandstone overlain by siltstone and silty limestone; the Pony Express limestone member of the Upper Jurassic Wanakah formation, with thickness of 20 to 30 feet and consisting of thinly bedded limestone; the Upper Jurassic Entrada sandstone, with thickness of 80 to 110 feet and composed of fine-grained sandstone and which hosts the vanadium-uranium deposit of the Graysill mine; and the Upper Triassic Dolores formation, which is nearly 600 feet thick and composed of interbedded sandstone, siltstone, conglomerate and minor limestone.

Vanadium-uranium deposition is restricted to the upper portion of the Entrada sandstone. The mineralized zone is a one-to-four-foot-thick interval of a dark-grey-to-black zone of organic material within the sandstone. A low-relief erosional unconformity separates the Entrada from the overlying arkosic Upper Triassic Dolores formation.

Transaction terms

The purchase will be accomplished by Pedro acquiring all of the issued and outstanding shares Colorado Vanadium Corp., a private company which owns a 100-per-cent interest in the Graysill property, in exchange for the issuance, pro rata, of 11.5 million common shares at a price of 20 cents per share and 5.75 million consideration warrants of Pedro to the existing shareholders of Colorado Vanadium. The consideration warrants shall entitle the holder to acquire one common share of Pedro at an exercise price of 30 cents per share for a period of 24 months following the closing date. In addition, Pedro will pay the vendors $450,000 at the closing date and a payment on the first anniversary of the closing date of a further $450,000. The shareholders of Colorado Vanadium will receive the benefit of a 2.5-per-cent net smelter royalty, of which 1.5 per cent may be purchased by Pedro at any time on or before the seventh anniversary of the closing date, in consideration of a $1.5-million cash payment. There is a $50,000 fee for the acquisition payable to a consultant. This is an arm's-length transaction, and the transaction will not create any new insiders of the corporation.

Reference: Graysill uranium/vanadium project, Dolores and San Juan counties, Colorado, NI 43-101 technical report, prepared for Pacific Metals Corp. by Jim Guilinger, consulting geologist of World Industrial Minerals, March 31, 2014.

Kelly Malcolm, PGeo, technical adviser to Pedro Resources, is the qualified person responsible for the technical content of this release and consents to its dissemination.

About Pedro Resources Ltd.

Pedro Resources is a Canadian exploration company listed on the TSX Venture Exchange, focused on vanadium exploration and development.

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