Mr. Deepak Varshney reports

USHA RESOURCES LTD. COMPLETES QUALIFYING TRANSACTION AND CONCURRENT FINANCING FOR $472,065

Usha Resources Ltd. has completed its qualifying transaction on Dec. 6, 2019, resulting in the acquisition of a direct 51-per-cent legal and beneficial interest in the Nicobat project in Northwest Ontario from Emerald Lake Development Corp. As consideration for the acquisition, the company issued an aggregate of 1.5 million common shares to Emerald Lake at a deemed price of 10 cents per common share for aggregate consideration of $150,000. In addition, the company has agreed to pay Emerald Lake a 2-per-cent net smelter returns royalty upon commencement of commercial production. A third party company that holds a 15-per-cent interest in the Nicobat project has also agreed to pay Emerald Lake a 2-per-cent NSR on the Nicobat project. The company and the third party company may buy back up to 1.5 per cent of the NSR from Emerald Lake, on a pari passu basis, by paying $2-million to the Emerald Lake at any time.

The company expects to resume trading under the symbol USHA on Dec. 11, 2019.

Concurrent financing

The company has completed its non-brokered private placement of 4,527,000 units, consisting of 1.2 million flow-through units at a price of 13 cents per flow-through unit and 3,327,000 non-flow-through units at a price of 9.5 cents per unit.

Each flow-through unit consists of one flow-through share in the capital of the company and one common share purchase warrant with each warrant exercisable to purchase one common share in the capital of the company at a price of 26 cents and expiring 24 months from the date of issuance. Each unit consists of one share and one warrant, with each warrant exercisable to purchase a share at a price of 19 cents and expiring 24 months from the date of issuance.

The proceeds from the flow-through portion of private placement will be used for Canadian exploration expenses that will qualify as flow-through mining expenditures, as defined in the Income Tax Act (Canada).

Net proceeds from the non-flow-through portion of the private placement will be utilized to finance the company's business, as further described in the company's filing statement dated Sept. 30, 2019, and filed on the company's SEDAR profile. The company paid a cash finder's fee in the amount of $875 to an arm's-length finder in connection with the private placement.

Two related parties to the company (as defined in Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions) participated in the private placement, subscribing for 527,700 private placement units for net proceeds to the company of $57,131.50 and representing approximately 11.66 per cent of the finances raised. Participation by such related parties in the private placement constitutes a related party transaction as defined under MI 61-101. However, as neither the fair market value of the private placement units acquired by the related parties, nor the consideration for the private placement units paid by such related parties, exceeds 25 per cent of the company's market capitalization, the issuance of securities is exempt from the formal valuation requirements of Section 5.4 of MI 61-101 pursuant to Subsection 5.5(a) of MI 61-101 and exempt from the minority approval requirements of Section 5.6 of MI 61-101 pursuant to Subsection 5.7(1)(a) of MI 61-101.

Following the closing of the acquisition and the private placement, the company has 10,227,000 common shares issued and outstanding. All securities issued in connection with the private placement and the acquisition are subject to a hold period expiring on April 7, 2020.

Board and management of the company

The directors and officers of the company following completion of the qualifying transaction are as follows:

• Deepak Varshney: director, chief executive officer and corporate secretary;
• Khalid Naeem: chief financial officer;
• Navin Varshney: director;
• David Ellet: director;
• Leif Smither: director.

We seek Safe Harbor.