CST: 27/06/2016 15:26:58   

Orca Holdings, LLC Exercises Its Right to Convert Production Royalty Into Common Shares of Ucore Rare Metals Inc.

161 Days ago

KETCHIKAN, ALASKA--(Marketwired - Jan 17, 2016) - Pursuant to the terms and conditions of an agreement (the "RoyaltyAgreement") between Ucore Rare Metals Inc. ("Ucore") (TSX VENTURE:UCU)(OTCQX:UURAF) and Orca Holdings, LLC ("Orca"), dated May 12, 2015, Orca has exercised its right to convert (the "RoyaltyConversion") its previously-acquired royalty, as described in the press releases of Ucore dated May 20, 2015 and June 12, 2015 (the "Royalty"), into common shares of Ucore ("Common Shares") at a price of CDN$0.25 per Common Share. The Royalty Conversion remains subject to applicable regulatory approvals. Orca paid an aggregate of USD$4.3 million to Ucore to acquire the Royalty.

"Orca has elected to convert its royalty into shares for many reasons, all of which have to do with our very strong belief in Ucore as an emerging leader in the global rare metals business," said Randy Johnson, President of Orca. "Orca is going long on Ucore, and we believe that the most effective way to obtain appreciation in our investment is via equity as opposed to a debt (royalty-based) position. Since the date of Orca's initial investment in Ucore, Orca has not sold a single share of UCU/UURAF, nor do we intend to do so at any time in the foreseeable future. In fact, due to our expectations, we are committed to retaining our position in Ucore over a horizon of years, with zero intention of share disposal until a very significant ROI has been achieved on our behalf and on behalf of other mutual shareholders in this long term enterprise. As evidence of this, Orca has elected to expand its equity stake in Ucore beyond the 10% ownership threshold, and is now registering as a reporting insider in Ucore. This maneuver will require Orca to disclose on SEDI any and all forthcoming disposals or acquisitions of Ucore shares, effective Jan. 18, 2016, as a matter of public record"

"Ucore management has done an outstanding job of positioning the company as the frontrunner in advanced rare earths separation technology, both in the United States and beyond," continued Johnson. The company's exclusive agreement with IBC Advanced Technologies for the application of Molecular Recognition Technology is drawing increasing notice, and we look forward to the imminent completion of the SuperLig®-One pilot facility near Salt Lake City, Utah. Orca is increasing not just its equity position in Ucore, but its advisory board involvement as well, with a view to assisting Ucore in strategic planning, plant design and operation, securing near term offtake relationships, and more."

Orca's decision to convert its royalty position to an equity position follows a detailed analysis of multiple factors: i) an equity position provides Orca with maximum exposure to Ucore's diverse range of business development, which now spans multiple applications and target industries (as opposed to a single royalty-specific customer); ii) the current undervaluation of Ucore's share price relative to the company's growth potential provides Orca with an ideal entry point to maximize its long term ROI; iii) the current $USD/CDN exchange rate provides Orca with a substantially larger share position than a conversion at any previous point; and iv) given Ucore's prospective growth trajectory, Orca is interested in maximizing its ongoing influence in the overall enterprise via equity ownership.

Based on the prevailing United States-Canadian exchange rate of CDN$1.44 for each USD$1.00, subject to the aforementioned regulatory approvals, Orca has acquired 24,721,560 Common Shares, representing 11% of the currently issued and outstanding Common Shares.

Immediately following its acquisition of the Common Shares pursuant to the Royalty Conversion, which remains subject to the aforementioned regulatory approvals, Randy Johnson, directly and indirectly through Orca and its affiliate Tyler Rental, Inc. will have beneficial ownership of, and control and direction over, 34,463,665 Common Shares on a non-diluted basis, representing approximately 15% of the currently issued and outstanding Common Shares. In addition, Mr. Johnson directly and indirectly owns or exercises control or direction over warrants and options to purchase 9,742,105 Common Shares. Assuming full exercise of these warrants and options, Mr. Johnson would own or exercise control or direction over, directly or indirectly, an aggregate of 44,205,770 Common Shares, representing approximately 19% of the issued and outstanding Common Shares on a partially diluted basis.

The Common Shares were acquired by Orca for investment purposes in the primary market, through direct negotiation with Ucore. Orca may, depending on market and other conditions, increase or decrease its beneficial ownership, control or direction over, or exercise its current rights to acquire, Common Shares or other securities of Ucore through market transactions, private agreements or otherwise.

The Common Shares issued in connection with the Royalty Conversion were issued in reliance upon the conversion, exchange or exercise exemption in section 2.42 of National Instrument 45-106 - Prospectus and Registration Exemptions.

A copy of the early warning report relating to the Royalty Conversion may be found on Ucore's profile at www.SEDAR.com or from Orca Holdings, LLC, Post Office Box 8158, 5216 Borch Street North, Ketchikan, AK 99901, United States.

Orca Holdings LLC
Randy Johnson
Managing Member
907-225-7170