PERE.L Regulatory News (PERE)

February 15th, 2018

Acquisition of Minto Copper-Gold-Silver Mine from Capstone Mining Corp and Suspension of Trading

THE INFORMATION CONTAINED IN THIS ANNOUNCEMENT IS DEEMED BY THE COMPANY TO CONSTITUTE INSIDE INFORMATION AS STIPULATED UNDER THE EU MARKET ABUSE REGULATION (596/2014). UPON PUBLICATION OF THE ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INFORMATION IS CONSIDERED TO BE IN THE PUBLIC DOMAIN.

London, United Kingdom - Pembridge Resources plc (LSE:PERE) ("Pembridge" or the "Company"), a mining-focused special purpose acquisition company ("SPAC") admitted to listing on the standard segment of the Official List by the United Kingdom Financial Conduct Authority (the "FCA") and to listing on the main market for listed securities of the London Stock Exchange plc, is pleased to announce that it has signed a Share Purchase Agreement dated February 14th, 2018 (the "SPA") with Capstone Mining Corp. ("Capstone") to acquire 100% of Minto Explorations Ltd. ("Minto") (the "Proposed Acquisition").

The consideration for the Proposed Acquisition is comprised of US$37.5 million in cash plus new ordinary shares of nominal value 1 pence each (each, an "Ordinary Share") in the capital of Pembridge (the "Consideration Shares"), such that, subsequent to the completion of the Proposed Acquisition and concurrent Financing (defined below), Capstone will own 9.9% of the issued Ordinary Share capital of Pembridge as enlarged by the Proposed Acquisition.

Key highlights

· Acquisition of Minto establishes Pembridge as a cash flow generating copper producer

· Minto is located in the mining friendly Yukon territory in Canada and has a 10 year production history with all key infrastructure, facilities and operating teams in place

· Current Capstone plan supports annual production averaging approximately 50,000 tonnes of highly quality copper concentrate containing 18,000 tonnes of copper, with gold and silver as by-products, capable of generating positive EBITDA and cash flow over the next four years

· Significant existing copper resource base with a history of reserve and resource replacement and growth

· Exploration potential property-wide including multiple open pit and underground exploration targets located in close proximity to existing operations

· Capstone to retain a material ownership stake in Pembridge with key members of Capstone's management team facilitating the transition through an advisory arrangement

· Pembridge management have identified several near-term initiatives with the potential to significantly extend mine life, enhance mine economics and improve margins

· Pembridge will undertake a financing to raise approximately US$50 million in connection with the Proposed Acquisition

David Linsley, Chief Executive Officer of Pembridge stated: "The acquisition of Minto represents a transformational opportunity for Pembridge and its shareholders. Minto fits perfectly with the Company's stated goal to acquire a producing and profitable mining operation to which our team can add further value. This acquisition will represent a core asset to Pembridge and will be used as a platform for future growth.

We believe Minto is an exceptional opportunity with the potential to benefit not only our shareholders but also the local and wider community for many years to come. We look forward to engaging with and working closely alongside the Selkirk First Nation, the various local communities, the Yukon Government and the substantial workforce at the mine.

Pembridge is guided by its board, management and technical team, who have a range of experience in mining operations and finance. In addition, two of our board members have prior connections to the Minto mine. Their experience, complemented by the rest of the team, will be instrumental in seeking out efficiencies and delineating the surrounding area's potential."

Minto mine overview

Minto is an open pit and underground copper-gold-silver mine located in central Yukon, approximately 240 kilometres north of the capital Whitehorse along the Klondike Highway. The Minto mine has been in continuous production since 2007 and is presently the only operating mine in Yukon territory. In excess of US$350 million of capital expenditure has been invested into Minto since site construction began some 12 years ago.

Minto started as an open pit mining operation utilising conventional truck and shovel mining. Concurrent underground operations commenced in 2014 using a combination of room and pillar and long-hole stoping retreat mining methods. Ore is transported to a processing plant with a capacity of 4,000 tonnes per day, which produces a high quality concentrate averaging 35-40% contained copper.

In 2017, Minto produced 16,332 tonnes of copper, 170,809 ounces of silver and 25,205 ounces of gold. Production guidance from Capstone for 2018 is 19,000 tonnes of copper. C1 cash costs are forecast by Capstone to be US$2.35 to US$2.45 per pound with all-in sustaining costs of US$2.55 to US$2.65 per pound.

Pembridge management has identified a number of potential operating efficiencies that it believes could significantly lower operating costs.

Currently, all silver ounces and up to 30,000 ounces of gold production per annum is subject to a precious metal purchase agreement with Wheaton Precious Metals Corp.

The existing Minto mine plan, prepared by Capstone, contemplates the continuation of operations through to mid-2021. This is based on the mining of certain of the open-pit and underground deposits comprising a portion of the existing resource base. Between 2008 and 2012, Capstone invested approximately US$24 million in exploration and added over 500,000 tonnes of contained copper resource. No exploration activities have been undertaken on the property since. However, a number of prospective exploration targets have been identified and will require drilling.

Immediately following the completion of the Proposed Acquisition, Pembridge management will implement a number of strategies to seek to significantly extend the current four year mine plan.

Mineral Reserves and Mineral Resources for Minto are prepared in accordance with Canada's National Instrument 43-101 - Standards of Disclosure for Mineral Projects and have, in the past, been annually stated by Capstone. A Mineral Reserve and Mineral Resource Report to the financial year ended 2017 will be prepared by the Company in conjunction with Capstone (the "Competent Persons Report") and will be included in a prospectus (the "Prospectus") to be filed by the Company in accordance with the Listing Rules and Prospectus Rules of the FCA.

Transaction

Under the terms of the SPA, Pembridge will acquire a 100% interest in Minto through the acquisition of Capstone's 100% interest in Minto Explorations Ltd. The purchase price for the Minto mine will be comprised of a cash consideration of US$37.5 million and the issuance of Consideration Shares such that Capstone will own 9.9% of the issued share capital of Pembridge as enlarged by the Proposed Acquisition. The Proposed Acquisition is structured on the basis that Minto is being acquired on a debt free, cash free basis with normalised working capital.

The Proposed Acquisition constitutes a reverse takeover for the purposes of the Listing Rules of the FCA, and accordingly the Company requested that the FCA suspend the listing of Pembridge's Ordinary Shares with immediate effect. The Company will proceed to prepare and publish a Prospectus in the coming weeks which will include the Competent Persons Report on the assets of the Company as enlarged by the Proposed Acquisition.

The Company and Capstone have entered into a lock-in and orderly market agreement (the "Lock-in"). The Lock-in will provide that (i) Capstone will agree not to sell any of the Consideration Shares for a period of one year from the date of Admission and, (ii) Capstone will have the right to participate in future equity offerings in order to maintain its pro rata ownership.

Completion of the Proposed Acquisition is subject to customary closing conditions, including shareholder and regulatory approvals. Pembridge currently expects the Proposed Acquisition to close in April 2018.

Financing

In connection with the Proposed Acquisition, Pembridge will undertake a financing to raise approximately US$50,000,000 (the "Financing'') to fund the acquisition price together and working and resource development capital. Pembridge is actively engaged with a number of potential capital providers and is currently reviewing available financing options. It is currently anticipated that the Financing will be funded through an equity placement (the "Placing"). GMP Securities L.P. and Arden Partners plc have been engaged by the Company to act as brokers and bookrunners in connection with the Placing.

The person who arranged for the release of this announcement on behalf of the Company was David Linsley, Chief Executive Officer.

Pembridge Resources plc: +44 20 7917 2968 (UK) / +1 236 333 5134 (Canada)

David Linsley, Chief Executive Officer

Thomas Horton, VP Project Development

Joint Brokers and Bookrunners

GMP Securities L.P. - Canada: +1 416 367 8600

Arden Partners - United Kingdom: +44 20 7614 5900

Fraser Marshall

SI Capital - United Kingdom: +44 14 8341 3500

Nick Emerson

Financial Public Relations

Tavistock Communications: +44 20 7920 3150

Jos Simson

Charles Vivian

About Pembridge Resources plc

Pembridge Resources is a mining focused SPAC listed on the main market for listed securities of the London Stock Exchange plc. The Company's management is composed of a team of senior leaders with experience in various board and executive positions with a complementary mix of expertise in geology, engineering, project appraisal, and commercial development across a wide range of commodity groups and mining jurisdictions.