Sherpa II Holdings Corp. (TSXV:SHRP.P) entered into a definitive purchase agreement to acquire 80% undivided interest in Bakar Property from District Metals Corp. (TSXV:DMX) for CAD 0.16 million on August 17, 2020. Additionally, Sherpa will also acquire a 100% undivided interest in all technical data relating to the Bakar Claims. The consideration shall be paid as follows: (a) CAD 0.05 million in cash and (b) 1.0 million common shares of the company. The company has also agreed to solely fund expenditures on the Bakar Claims in the amount of CAD 0.2 million over a period of six months. Furthermore, Sherpa II Holdings and District Metals have agreed to enter into an unincorporated joint venture with respect to their respective joint ownership of the Bakar Claims and the company will assume the obligations of the vendor under the royalty agreement dated July 12, 2019 between the vendor and Longford Capital Corp., providing for a royalty equal to 2.0% of the net smelter returns in respect of the Bakar Claims. The Agreement requires the company to, as soon as practicable but subject to Exchange approval and compliance with Exchange policies, pay to the vendor a refundable deposit of CAD 0.04 million in the form of an advance to the vendor. The vendor shall use the deposit only for exploration and related expenditures respecting the Bakar Claims, and any such expenditures must be pre-approved in writing by the company. Concurrent with the closing of the transaction, Sherpa expects to complete a private placement of units of the company for gross proceeds of CAD 0.3 million. Each unit is expected to be issued at a price of CAD 0.08 and consist of one common share of the company and one common share purchase warrant. Each warrant will be exercisable into one common share of Sherpa at a price of CAD 0.105 for five years. Sherpa may pay finder's fees in connection with the Private Placement, in accordance with the policies of the Exchange. The net proceeds of the Private Placement will be used for exploration and related expenditures respecting the Bakar Claims and working capital purposes. Closing of the Private Placement is conditional upon completion of the transaction. As of September 16, 2020 the terms of the Sherpa II Holdings Corp. private placement have changed, such that the Company expects to issue 1.25 million common shares in the capital of the company at a price of CAD 0.08 per common share for aggregate gross proceeds of CAD 0.1 million and 2 million common shares to be issued as flow-through shares at a price of CAD 0.10 per Flow-Through common share for aggregate gross proceeds of CAD 0.2 million. The net proceeds of the Private Placement will be used for exploration and related expenditures respecting the Bakar Claims.

Upon completion of the transaction, it is expected that one independent director will be added to the Board such that it consists of four directors, of which one will be independent. In addition, upon completion of the transaction, it is expected that Robert Scott will be appointed as the Chief Financial Officer of the company. Additionally, Thomas O'Neill will serve as Chief Executive Officer and Director, Emily Davis and Galen McNamara will both serve as Directors and Maria Wells will serve as Corporate Secretary. Upon completion of the transaction, Sherpa intends to be listed on the Exchange as a Tier 2 mining issuer and will principally focus on the exploration and development of the Bakar Claims. Sherpa does not expect to change its name or trading symbol.

Completion of the transaction will be subject to certain conditions, including but not limited to: (a) the receipt of all necessary approvals of the boards of directors of Sherpa and the vendor; (b) the receipt of all required consents and approvals, including without limitation, approval of the transaction by the Exchange as Sherpa's Qualifying Transaction; (c) Sherpa satisfying the initial listing requirements set by the Exchange for a Tier 2 mining issuer; (d) the completion by Sherpa of the Private Placement; and (e) the completion of satisfactory mutual due diligence. Sponsorship of a Qualifying Transaction of a capital pool company is required by the Exchange unless exempt in accordance with Exchange policies or a waiver is granted by the Exchange. Sherpa intends to apply for an exemption from the sponsorship requirements or a waiver of sponsorship. The transaction is subject to TSXV approval. The Exchange has conditionally accepted the Transaction as the Qualifying Transaction of Sherpa pursuant to a letter dated December 14, 2020. Closing of the Transaction is expected to occur on or prior to September 17, 2020. As of September 16, 2020 closing of the transaction is expected to occur in October 2020. As of September 24, 2020 Sherpa II Holdings Corp. (TSXV:SHRP.P) entered into an amending agreement with District Metals Corp on September 23, 2020, which states that closing of the transaction is expected to occur in December 31, 2020. As of December 15, 2020, the deal is expected to close on or about December 18, 2020. Jennifer Traub from Cassels Brock & Blackwell LLP acted as a legal advisor to Sherpa II Holdings Corp. Computershare Investor Services Inc. acted as transfer agent and registrar of Sherpa II Holdings Corp.

Sherpa II Holdings Corp. (TSXV:SHRP.P) completed the acquisition of 80% undivided interest in Bakar Property from District Metals Corp. (TSXV:DMX) on December 15, 2020. Sherpa II paid CAD 0.05 million and issued 1 million common shares, which are being subject to a hold period of four months and one day, expiring on April 19, 2021.