Investors

Vancouver, B.C. – June 18, 2021 – Regal Resources Inc. (“Regal” or the “Company”) today announces the results of British Columbia Securities Commission (“BCSC”) hearing described in the management information circular dated June 8, 2021 (the “Circular”) and involving the application of a debentureholder (the “Debentureholder”) to have the cease trade order (“CTO”) issued by the BCSC partially revoked to permit the conversion of the debenture and interest into common shares (the “Debenture Shares”) and non-transferable warrants (“Debenture Warrants” and together with the Debenture Shares, the “Debenture Units”) of the Company at a conversion price of $0.10 per Debenture Unit. Upon issuance, each Debenture Warrant is exercisable by the Debentureholder for a period of two years upon payment of the exercise price of $0.20 per common share.

The BCSC has ruled in favour of the Debentureholder and has granted a partial revocation of the CTO. Written reasons for the ruling have not been provided, but are expected to follow in due course. For additional background on the Debenture, Debentureholder and her relationship to former management, and the Company’s position on opposing the partial revocation, please refer to the Circular, which has been filed on the Company’s SEDAR profile at www.sedar.com.

Subsequent to the BCSC’s ruling, the Debentureholder has made demand for the Debenture Units to be issued. The Company expects to comply with this demand and as a result will issue approximately 14.5 million Debenture Units to the Debentureholder in respect of the conversion of approximately $1.45 million in Debenture principal and interest (the “Conversion Amount”).

As highlighted in the Circular, the issuance of the Debenture Units to the Debentureholder will significantly impact the consideration attributable to shareholders of the Company in connection with the previously announced proposed sale of the Company’s interest in the Sunnyside Property (the “Transaction”) to Barksdale Resources Corp. (“Barksdale”).

In terms of specific impacts, the Company notes the following:

• the total value of the Transaction will be reduced by the Conversion Amount, as those funds will cease to be debt of the Company and will be converted to equity. Under the terms of the Transaction, Barksdale agreed to purchase and offset up to $4 million of debt. The Company’s total debt subject to purchase by Barksdale will now be approximately $2.55 million. As a result, the value of the Transaction decreases from $0.4043 to $0.2884 per Regal common share.

• The Conversion Amount will result in the issuance of an additional approximate 14,500,000 Debenture Shares (or 29,000,000 common shares upon full exercise of the Debenture Warrants). As a result, the number of Barksdale common shares received by each Regal shareholder pursuant to the Transaction will decrease from 0.4534 to 0.3492 for each common share of Regal (or 0.2839 upon full exercise of the Debenture Warrants).

• It is not expected that any Debenture Shares (or shares underlying the Debenture Warrants) will be eligible to vote on the Transaction given the June 3, 2021 record date.

As described in the Circular, if the Transaction is not approved by the Company’s shareholders following the issuance of the Debenture Units, the Company expects its various creditors, secured and otherwise, to initiate enforcement proceedings in respect of amounts owing. In such event and absent a timely alternative financing arrangement, the assets of the Company, including its indirect interest in the Sunnyside Project, may be subject to sale and the proceeds from such sale could be significantly less than what is being offered under the Transaction.

Regal Resources Inc. is a junior mineral exploration and development company based in Vancouver, Canada. The Company has an interest in the Sunnyside project, located in Santa Cruz County, Arizona, USA.

ON BEHALF OF REGAL RESOURCES INC.

Matthew Sauder
CEO and Chairman

For more information, please visit www.regalres.com

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION: This news release includes “forward-looking information” under applicable Canadian securities legislation. Such forward-looking information reflects management’s current beliefs and are based on a number of estimates and assumptions made by and information currently available to the Company that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking information. Readers are cautioned that such forward-looking information are neither promises nor guarantees, and are subject to known and unknown risks and uncertainties including, but not limited to, general business, economic, competitive, political and social uncertainties, uncertain and volatile equity and capital markets, lack of available capital, actual results of exploration activities, environmental risks, future prices of base and other metals, operating risks, accidents, labor issues, delays in obtaining governmental approvals and permits, and other risks in the mining industry. In addition, there is uncertainty about the spread of COVID-19 and the impact it will have on the Company’s operations, supply chains, ability to access mineral properties, conduct due diligence or procure equipment, contractors and other personnel on a timely basis or at all and economic activity in general. All forward-looking information contained in this news release is qualified by these cautionary statements and those in our continuous disclosure filings available on SEDAR at www.sedar.com. Accordingly, readers should not place undue reliance on forward-looking information. The Company disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by law.