Mr. Douglas Mason reports

RAINY MOUNTAIN ANNOUNCES RIGHTS OFFERING

Rainy Mountain Royalty Corp. will be offering rights to holders of its common shares resident in Canada at the close of business on the record date of Jan. 30, 2017, on the basis of one right for each common share held. Two rights will entitle the holder to subscribe for one unit of the company at a subscription price of 10 cents. A total of 26,594,113 rights will be issued. Each unit will consist of one common share and one-half of one share purchase warrant, with each whole warrant exercisable into one common share for a period of 24 months from the issuance date of the units at a price of 15 cents for the first 12 months and at an exercise price of 25 cents thereafter. The rights will trade on the TSX Venture Exchange under the symbol RMO.RT, commencing on Jan. 26, 2017, and will expire at 2 p.m. (Vancouver time) on Feb. 24, 2017, after which time unexercised rights will be void and of no value. Shareholders who fully exercise their rights will be entitled to subscribe for additional units, if available as a result of unexercised rights prior to the expiry time, subject to certain limitations set out in the company's rights offering circular.

Details of the rights offering

Details of the rights offering will be set out in the rights offering notice and rights offering circular, which will be available under Rainy Mountain's profile on SEDAR. The rights offering notice and accompanying rights certificate will be mailed to each eligible shareholder of the company as at the record date. Registered shareholders who wish to exercise their rights must forward the completed rights certificate, together with the applicable proceeds, to the rights agent, TSX Trust Company, on or before the expiry time. Shareholders who own their common shares through an intermediary, such as a bank, trust company, securities dealer or broker, will receive materials and instructions from their intermediary. Rights delivered to brokers, dealers or other intermediaries will not be delivered by those intermediaries to beneficial shareholders who are residents in a jurisdiction outside of Canada.

The company currently has 26,932,875 common shares outstanding; however, as rights will only be issued to shareholders resident in Canada, a total of 26,594,113 rights will be issued. A minimum of five million units and a maximum of 13,297,056 units will be issued under the rights offering. If all the rights issued under the rights offering are validly exercised, the offering will raise gross proceeds of approximately $1,329,705, the net proceeds of which will be used for exploration and development of the company's Brunswick property, as well as for general working capital requirement.

Any person who will own or control (beneficially or as nominee) more than 10 per cent of the outstanding common shares of Rainy Mountain at closing of rights offering must file a personal information form (PIF) with the TSX Venture Exchange, and the rights offering will only close in escrow until the exchange has notified the company that the results of the review of the relevant PIFs are satisfactory.

Soliciting dealer and standby commitment

In connection with the rights offering, the company has entered into a soliciting dealer and standby guarantee agreement with Mackie Research Capital Corp. Under the standby agreement, MRCC will use commercially reasonable efforts to assist the company in soliciting the exercise of rights. MRCC has also agreed to a standby commitment whereby it will purchase up to, but not exceeding, $500,000 worth of units. The company has also granted MRCC the right to purchase such number of units that is equal to the number of units for which the company has not received subscriptions by the expiry time. The top-up right may be exercised by MRCC, in its sole discretion in whole or in part, or not at all.

The company will pay MRCC a corporate finance fee of $17,500, plus disbursements and applicable taxes, and a cash commission of 8 per cent of the gross proceeds raised under the rights offering, excluding any proceeds raised as a result of the standby guarantee or as a result of Mackie's exercising the top-up right. The company will also grant MRCC broker warrants entitling MRCC to acquire that number of units equal to 25 per cent of the number of units distributed pursuant to the rights offering for proceeds of up to $500,000 and 10 per cent of the remaining number of common shares distributed pursuant to the rights offering, with each broker warrant exercisable at 13.5 cents to acquire one common share for a period of 24 months from the date of the closing of the rights offering.

For further information, contact Clive Shallow, shareholder communications, at 604-922-2030 or visit the company's website.

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