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Otterburn Resources Signs US$15,000,000 Senior Secured Gold Loan Facility Termsheet With Auramet International LLC For Kainantu Mine Project

December 2, 2014

VANCOUVER, BRITISH COLUMBIA–(Dec. 2, 2014) – Otterburn Resources Corp. (TSX VENTURE:OBN) (the “Company”) is pleased to announce that the Company and K92 Holdings International Limited (“K92”) have signed a termsheet for a US$15,000,000 Senior Secured Gold Loan Facility (the “Facility”) with Auramet International LLC (“Auramet”).

The Facility relates to the Company’s intended purchase of K92 which holds rights to acquire the Kainantu gold and copper project in Papua New Guinea (see Otterburn’s news release dated August 25, 2014 describing a share exchange agreement between the Company and K92 through which Otterburn expects to acquire K92 and the Kainantu Mine Project).

Under the termsheet, the US$15,000,000 to be provided to K92 will be used to re-start the Kainantu Mine Project in the Eastern Highland Province of Papua New Guinea and will be repayable to Auramet by monthly delivery of gold from September 2015 through the maturity date in December 2016. There is no penalty for early repayment. The number of gold ounces to be delivered to Auramet to repay the Facility will be set upon signing the final Facility agreement (expected by December 19, 2014), and will be based on the then current spot price of gold, less an agreed discount. In addition, it is expected that Auramet will receive 1,000,000 share purchase warrants with a $0.65 strike price and a 3 year term, as well as structuring and drawdown fees totalling 3% of the Facility amount.

Concurrent with the financing, K92 will also enter into a Gold Purchase and Sale Agreement with Auramet through which gold will be sold to Auramet at market rates (with zero discount to market rates) for a period of time up to the maturity date of December 31, 2016.

Ian Stalker, CEO of K92 states: “We are delighted to partner with Auramet in bringing the Kainantu Mine Project back into production for mid-2015. The Auramet Facility is a strong vote of confidence from an experienced mining lender and accessing this financing will minimize shareholder dilution while giving K92 the funds to deploy our business plan for this exceptional opportunity. It is a short term facility, with payback by end of December 2016, and no ongoing commitments required beyond the payback date. K92 will retain full upside exposure to the gold price on all ounces not used to repay the Auramet Facility. We look forward to working with Auramet and to bringing the Kainantu Mine Project back into production, on time and on budget.”

Auramet is a global physical metals merchant run by highly experienced professionals providing a full range of services including metal merchant, merchant banking, structured finance and advisory services. Auramet prides itself on building strong and loyal relationships by bringing innovation, creativity and experience.

The Auramet Facility is subject to the Company raising at least US$15,000,000 in an equity raise, final legal and technical due diligence, and satisfactory documentation, which is expected to be completed by December 19, 2014. The terms set out in the termsheet are not exhaustive. There can be no assurance that the Company will enter into final documentation with Auramet, or draw down the Facility, on the terms described herein or at all.


Brian Lueck, President & CEO

Completion of the transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and disinterested shareholder approval. The transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all. 

Investors are cautioned that, except as disclosed in the Filing Statement or Management Information Circular to be prepared in connection with the transaction, any information released or received with respect to the reverse take-over may not be accurate or complete and should not be relied upon. Trading in the securities of Otterburn Resources Corp. should be considered highly speculative.

The TSX Venture Exchange has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.

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.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION: This news release includes certain “forward-looking statements” under applicable Canadian securities legislation. Forward-looking statements include, but are not limited to, statements with respect to: the terms and conditions of the Company’s proposed acquisition of K92; the terms and conditions of the proposed gold loan facility; and the Company’s proposed private placement. Forward-looking statements are necessarily based upon a number of estimates and assumptions 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 statements. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Specifically, there is no assurance the Company will be able to negotiate a final agreement with Auramet on terms satisfactory to the Company, or at all. Accordingly, readers should not place undue reliance on forward-looking statements. Otterburn disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.


Darren Devine

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