Euromax Announces Closing of Private Placement Financing

Euromax Resources Ltd., Vancouver, BC, 13 May 2019 (TSX: EOX): (Euromax or the Company), is pleased to announce that it has closed its previously announced non-brokered private placement financing to one of its current major shareholders, Galena Resource Equities Limited (Galena), an entity controlled by Galena Asset Management S.A., which is an affiliate of the Trafigura Pte. Ltd. (Trafigura), for gross proceeds of CAD$9,188,040 (USD$6,900,000) (the Private Placement). Pursuant to the Private Placement, the Company has issued 147,008,640 units (the Units), each Unit consisting of one common share in the capital of the Company (each, a Common Share) and one Common Share purchase warrant (each, a Warrant), at an offering price of CAD$0.0625 per Unit to Galena. Each Warrant may be exercised for the purchase of one Common Share at a price of CAD$0.15 for a period of two years following the closing of the Private Placement. The proceeds of the Private Placement will be used for the development of the Company’s Ilovica-Shtuka Copper-Gold Project (Ilovica-Shtuka or the Project) and for general corporate purposes.

Euromax is also pleased to announce that it has closed its previously announced concurrent financing (the Concurrent Offering and, together with the Private Placement, the Transaction), on the same terms as the Private Placement, of 17,641,037 Units for gross proceeds of CAD$1,102,564.80 (USD$828,000). Martyn Konig, a director and insider of the Company, today acquired 6,988,237 Units for aggregate gross proceeds to the Company of USD$328,000.

As previously announced, in connection with the closing of the Private Placement, the Company and Galena have amended their existing ancillary rights agreement dated April 10, 2018, pursuant to which Galena has been granted the right to nominate two additional directors of the Company’s board of directors (the Board) (for four directors in total) for such time as it (collectively with its affiliates) holds greater than 20% of the Company’s issued and outstanding Common Shares (calculated on a fully diluted basis). The Company has also amended the off-take agreement entered into on April 6, 2018 with Trafigura such that Trafigura will have 100% ownership of the sale of copper concentrate produced at Ilovica-Shtuka.

As a result of the closing of the Transaction, Galena will hold 176,008,640 Common Shares and 176,008,640 Warrants, representing 53.11% of the issued and outstanding Common Shares on a non-diluted basis and 69.38% on a partially diluted basis. An early warning report will be filed with the applicable securities regulators in connection with Galena’s acquisition of Common Shares, and a copy of such report will be available on SEDAR at www.sedar.com.

As a condition to closing the Private Placement, the Company has entered into agreements with each of the European Bank for Reconstruction and Development (EBRD) and CC Ilovitza Limited (CC) to, amongst other things: (i) extend the maturity date of the Debentures to February 28, 2021, (ii) revise the conversion price in respect of the principal, accrued interest, and applicable fees owing under the Debentures to CAD$0.15 per Common Share, (iii) reduce the interest rate owing under the Debentures from 20% to 7% per annum (compounding annually) effective March 31, 2019, and (iv) waive any pre-emptive or participation rights EBRD and CC may have with respect to the Private Placement.

Pursuant to Section 604(e) of the Toronto Stock Exchange (TSX) Company Manual, the Company has been approved by the TSX for an exemption from shareholder approval requirements, on the basis of financial hardship. In connection therewith, and as disclosed by the Company in its February 12, 2019 press release, the TSX has placed Euromax under remedial delisting review, which is normal practice when a listed issuer relies on the Section 604(e) financial hardship exemption. The Company has 120 days from the date of notification to regain compliance with the TSX's continued listing requirements.

The securities issued pursuant to the Transaction will be subject to a four month hold period from the date of closing in accordance with applicable Canadian securities laws.