Mr. David Rosenkrantz reports

PINEHURST CAPITAL II AND HALCONES PRECIOUS METALS ANNOUNCE CLOSING OF SUBSCRIPTION RECEIPT OFFERING

Pinehurst Capital II Inc. target Halcones Precious Metals Inc. has closed its previously announced brokered private placement of subscription receipts. Under the subscription receipt offering, Halcones issued an aggregate of 11,462,200 subscription receipts at a price of 30 cents per subscription receipt for gross proceeds of $3,438,660. The subscription receipt offering was completed pursuant to an agency agreement dated June 24, 2022, among Halcones, Pinehurst, Clarus Securities Inc., iA Private Wealth Inc. and Haywood Securities Inc. The subscription receipts are governed by the terms of a subscription receipt agreement dated June 24, 2022, and among Halcones, the lead agent and Computershare Trust Company of Canada.

As previously announced, on Jan. 25, 2022, Halcones and Pinehurst entered into an amalgamation agreement, as amended on May 20, 2022, setting out the terms of the reverse takeover (RTO) of Pinehurst by the shareholders of Halcones by way of a three-cornered amalgamation with a wholly owned subsidiary of Pinehurst incorporated under the laws of Ontario. Pinehurst, as the resulting issuer following the completion of the RTO, will continue the business of Halcones under the name Pinehurst Precious Metals Corp. or such other name as determined by Halcones.

The gross proceeds from the sale of the subscription receipts, less the cash portion of the agents' commission and agents' expenses, are being held in escrow by Computershare in accordance with the subscription receipt agreement and will be released to Halcones upon satisfaction and/or waiver of certain escrow release conditions, including completion of all conditions precedent to the RTO. If the escrow release conditions are satisfied or waived on or before Dec. 24, 2022 (subject to extension pursuant to the terms of the subscription receipt agreement), the escrowed proceeds from the subscription receipt offering will be released to Halcones. If the escrow release conditions are not satisfied or waived by that date or the amalgamation agreement is terminated or Halcones announces to the public by way of press release, or advises the lead agent and Computershare in writing, that it does not intend to satisfy the escrow release conditions in accordance with the subscription receipt agreement, the gross proceeds and pro rata entitlement to interest earned on the escrowed proceeds will be paid to the holders of the subscription receipts. The resulting issuer intends to use the net proceeds from the subscription receipt offering for (i) exploration of the Carachapampa project and (ii) general corporate and working capital purposes.

Each subscription receipt will, without any further consideration on the part of the subscriber, automatically convert on the satisfaction or waiver of the escrow release conditions into one Halcones common share and one-half of one Halcones warrant. Each Halcones warrant will entitle the holder to purchase one Halcones common share at a price of 40 cents per Halcones common share for a period of 24 months following the closing of the subscription receipt offering. Each Halcones common share and each Halcones warrant will be immediately exchanged for one common share of Pinehurst and one common share purchase warrant of Pinehurst (each on a postconsolidation basis). Pursuant to the amalgamation agreement, prior to completing the RTO, Pinehurst common shares shall be consolidated on the basis of 0.4716981 postconsolidation Pinehurst common share for each one preconsolidation Pinehurst common share.

In connection with the subscription receipt offering, Halcones paid the agents a commission satisfied by an aggregate cash payment of $245,706.20. As additional consideration, Halcones issued 802,354 broker warrants to the agents, each entitling the agents to purchase one Halcones common share (and subsequently one resulting issuer common share) at the issue price for a period of 24 months following the date of issuance of the release notice (as defined in the agency agreement).

We seek Safe Harbor.