Mr. Robert Eadie reports

RED HUT METALS SIGNS LOI FOR RIGHTS TO GOLD-BEARING CLAIMS IN CALIFORNIA UPDATE

Red Hut Metals Inc. has released an update further to the news release of Feb. 23, 2017, wherein the company announced that it had signed a letter of intent whereby Red Hut will acquire by way of assignment all of the contractual interests held by the assignors in various patented and located mineral claims with a rich history of gold mineralization in western California, United States.

The Providence group of mines is located in the Summerville mining district, Tuolumne county, California, upon the eastern belt of the Mother Lode district. A number of high-grade, well-known Mother Lode gold mines of California are found within this belt.

The company is pleased to announce that it has staked a further nine claims contiguous to the existing Providence patented and located claims. The company acquired the additional ground to protect the potential unexplored strike and downdip extensions of the known mineralization.

About the property

The property includes six parcels which have been fully patented and are owned in fee simple, and 22 staked mining claims on Bureau of Land Management and U.S. Forest Service property (320 acres). The property host several historical mines and a historical mill site.

This news release has been reviewed and approved by John Kowalchuk, PGeo, who is acting as the company's qualified person for the Providence mines project, in accordance with regulations under National Instrument 43-101 standards. This is an arm's-length transaction.

The transaction will constitute a reviewable transaction under the policies of the TSX Venture Exchange, and, as such, it will require approval of the exchange. As no change of control will result, Red Hut will not be required to seek the approval of its shareholders.

Private placement

In conjunction with the transaction, Red Hut will undertake, subject to the acceptance of the exchange, a private placement of at least $1.2-million in gross proceeds through the issuance of at least 12 million units at a price of 10 cents per unit. Each unit will comprise one common share and one-quarter of one common share purchase warrant, with each whole warrant entitling the holder to purchase one common share of Red Hut at a price of 25 cents per share for a period of one year. Red Hut expects to pay finders' fees of not more than 7 per cent (payable in Red Hut shares) and 7 per cent in finders' warrants (with terms similar to the warrants).

The proceeds will be used to meet the cash requirements of the transaction and to undertake the recommended work program for the property.

Certain conditions to transaction

The completion of the transaction will be subject to the satisfaction of certain conditions, including:

• Red Hut completing the financing;
• Receipt of exchange approval of the transaction and the financing.

Other matters

Subject to regulatory approval, a finder's fee of 5 per cent of the value of the transaction is payable to Mackie Research Capital Corp. of Vancouver, B.C., in the form of Red Hut shares.

We seek Safe Harbor.