Toronto, Ontario – September 5, 2018 – Barkerville Gold Mines Ltd. (TSXV:BGM) (“Barkerville” or the “Corporation“) announces today that it has entered into a second amended and restated royalty purchase agreement (the “Royalty Purchase Agreement“) with Osisko Gold Royalties Ltd (“Osisko“) pursuant to which Osisko will acquire from Barkerville, a 1.75% net smelter return (“NSR“) royalty on the Cariboo property (the “Property“) for the aggregate purchase price of CAD$20 million in immediately available funds (the “Royalty Transaction“).

Of the purchase price payable on closing, CAD$2,000,000 will be kept by Barkerville in a segregated restricted account and will not be available to Barkerville until certain conditions precedent are satisfied (the “Restricted Funds“). Those conditions precedent include the delivery to Osisko of certain waivers and consents required from third parties in connection with the Royalty Transaction (the “Conditions Precedent“).

Under the terms of the Royalty Purchase Agreement, the Corporation also has the option to grant Osisko an additional 1% NSR on the Property (the “Option Royalty“) for additional cash consideration of CAD$13 million, at any point between the closing date of the Royalty Transaction and December 31, 2018 (the “Royalty Option Period“). In order to grant the Option Royalty and receive the additional consideration, Barkerville must have successfully satisfied the Conditions Precedent to the release of the Restricted Funds.   

In the event that (i) the Corporation announces a change of control during the Royalty Option Period, or (ii) Osisko participates in an equity financing of the Corporation during the Royalty Option Period, if the Option Royalty remains unexercised, Osisko will have the right to purchase the Option Royalty.

As part of the Royalty Transaction, Barkerville will grant to Osisko 10,000,000 common share purchase warrants of the Corporation (the “Warrants“). The Warrants will be exchangeable for common shares of the Corporation (the “Common Shares“) at an exercise price of CAD$0.75 per Common Share for a period of 36 months following the closing of the Royalty Transaction. All securities issued under the Royalty Transaction will be subject to a hold period expiring four months and one day from the date of closing.  

The gross proceeds from Royalty Transaction will be used by the Corporation to fund exploration and studies related to the Property and for general corporate purposes. The Royalty Transaction remains subject to the final approval of the TSX Venture Exchange.

Related Party Disclosure

The Royalty Transaction is considered to be a “related party transaction” for purposes of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101“) and Policy 5.9 – Protection of Minority Security Holders in Special Transactions of the TSX Venture Exchange. The Corporation is relying on exemptions from the formal valuation and minority shareholder approval requirements available under MI 61-101. The Corporation is exempt from the formal valuation requirement in section 5.4 of MI 61-101 in reliance on sections 5.5(a) and (b) of MI 61-101 as the fair market value of the transaction is not more than the 25% of the Corporation’s market capitalization, and no securities of the Corporation are listed or quoted for trading on prescribed stock exchanges or stock markets. Additionally, the Corporation is exempt from minority shareholder approval requirement in section 5.6 of MI 61-101 in reliance on section 5.7(b) as the fair market value of the transaction is not more than the 25% of the Corporation’s market capitalization. The board of directors of Barkerville approved the Royalty Transaction, with Sean Roosen, John Burzynski and Chris Lodder having declared a conflict of interest in, and abstaining from voting on, the matters being considered.

About Barkerville Gold Mines Ltd.

The Corporation is focused on developing its extensive mineral rights package located in the historical Cariboo Mining District of central British Columbia. Barkerville’s Cariboo Gold Project mineral tenures cover 1,950 square kilometres; along a strike length of 67 kilometres which includes several past producing placer and hard rock mines, making it one of the most well-endowed land packages in British Columbia. Since the management change in mid-2015, the Corporation has unlocked the fundamental structural controls of gold mineralization. The Company’s Brownfield’s exploration team is focused on developing and delineating a mineable resource within the 7 kilometers of principle project area located near the town of Wells, British Columbia. The Company’s Greenfield’s team is developing quality exploration assets throughout the remaining land package through systematic, scientific, exploration. The operation’s team is focused on developing and mining the Bonanza Ledge and BC Vein deposits on Barkerville Mountain. This operation allows the company to generate near term cash flow, train a local work force, keeps the present mining permit active, and de-risk’s the project through staged production growth. Processing of material from these deposits is processed at the QR mill. QR is a fully owned, permitted mill and tailings facility, located approximately 110 kilometres away from Wells, and can be accessed by an all-season road. For more information on Barkerville Gold Mines Ltd., please contact:

Chris Lodder

President and Chief Executive Officer

155 University Avenue, Suite 1410

Toronto, Ontario, Canada

[email protected]
416-775-3671

Cautionary Statement on Forward-Looking Information

This news release includes certain “forward-looking information” and “forward-looking statements” (collectively, “forward looking statements”) within the meaning of applicable Canadian securities legislation, including statements regarding the completion of the Royalty Transaction, satisfaction of conditions precedent with respect to the release of the restricted funds, the Corporation’s ability to exercise the Royalty Option and the use of proceeds. Forward-looking statements are statements that are not historical facts and are generally, although not always, identified by words such as “expect”, “plan”, “anticipate”, “project”, “target”, “potential”, “schedule”, “forecast”, “budget”, “estimate”, “intend” or “believe” and similar expressions or their negative connotations, or that events or conditions “will”, “would”, “may”, “could”, “should” or “might” occur. All such forward-looking statements are based on the opinions and estimates of management as of the date such statements are made. Forward-looking statements necessarily involve assumptions, risks and uncertainties, certain of which are beyond Barkerville’s control, including risks associated with the ability of Barkerville to satisfy the conditions precedent required to release the restricted funds and exercise of the Option Royalty; the timing and ability of the Corporation to obtain final approval of the Royalty Transaction from the TSX Venture Exchange, an exemption being available under MI 61-101 and Policy 5.9 of the TSX Venture Exchange from the minority shareholder approval and valuation; the volatility of metal prices; risks and dangers inherent in exploration, development and mining activities; risks of not achieving construction and development timelines and estimates; uncertainty of mineral reserve and mineral resource estimates; the ability to obtain and maintain any necessary permits, consents or authorizations required for mining activities; risks related to environmental regulations or hazards and compliance with complex regulations associated with mining activities; fluctuations in price and availability of energy and other inputs necessary for construction development and ultimately mining operations; shortages or cost increases in necessary equipment, supplies and labour; regulatory risks; climate change risks; volatility of global financial conditions; risks related to reliance upon contractors and third parties; challenges to title or surface rights; dependence on key personnel; risks associated with conflicts of interest among the Corporation’s directors and officers; the risk of an uninsurable or uninsured loss; litigation risk; taxation, including changes in tax laws and interpretation of tax laws; community and aboriginal support for the Corporation’s operations including risks related to strikes and the halting of such operations, from time to time; as well as other factors identified and as described in more detail under the heading “Risk Factors” in Barkerville’s most recent management discussion and analysis and the Corporation’s other filings with Canadian securities regulators, which may be viewed at www.sedar.com.

The list is not exhaustive of the factors that may affect the Corporation’s forward-looking statements. There can be no assurance that such statements will prove to be accurate, and actual results, performance or achievements could differ materially from those expressed in, or implied by, these forward-looking statements. Accordingly, no assurance can be given that any events anticipated by the forward-looking statements will transpire or occur, or if any of them do, what benefits or liabilities Barkerville will derive therefrom. The Corporation’s forward-looking statements reflect current expectations regarding future events and operating performance and speak only as of the date hereof and except as required by applicable securities laws, the Corporation does not assume any obligation to update forward-looking statements if circumstances or management’s beliefs, expectations or opinions should change other than as required by applicable law. For the reasons set forth above, undue reliance should not be placed on forward-looking statements.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein.