Ascot Resources Ltd. (TSX.V:AOT, OTCQX:AOTVF) (Ascot) entered into a definitive arrangement agreement to acquire IDM Mining Ltd. (TSX.V:IDM, OTCQB:IDMMF) (IDM) from Osisko Gold Royalties Ltd. (TSX:OR) (Osisko), Ruffer LLP, Sprott Inc. (TSX:SII) and other shareholders for CAD 44.6 million on January 6, 2019. As per terms, Each IDM shareholder will be entitled to receive 0.0675 of a common share of Ascot for each share of IDM held. The consideration values IDM at approximately CAD 0.086 per share. Each IDM warrant will be converted into an Ascot warrant as per the terms of its warrant certificate. IDM stock options will be exchanged for replacement options under Ascot's stock option plan or cancelled without payment in accordance with the plan of arrangement. Ascot will provide IDM with a CAD 3.35 million secured convertible bridge loan to improve IDM's liquidity until closing. The loan will have an interest rate of CDOR plus 9% per annum and is convertible into IDM' common shares at CAD 0.0857 per share. If the agreement is terminated, the loan will become payable within 30 days or six months of termination, depending on the circumstances. If Ascot converts the loan into IDM common shares it will not vote its IDM common shares at the IDM shareholder meeting to approve the transaction. Concurrent with entering into the agreement, Ascot signed a term sheet with Sprott Resource Lending for a convertible note which will mature in two years with an interest rate of 8% to 8.5%, and may be paid in cash or common shares of Ascot.

As a result of this transaction, IDM will become a subsidiary of Ascot. Upon completion of the transaction, it is expected that IDM shareholders will hold approximately 16.7% of Ascot shares on an outstanding basis. The agreement provides for a CAD 2 million termination fee payable by IDM to Ascot in certain circumstances and a reciprocal expense reimbursement fee of CAD 0.5 million payable under certain circumstances. Andree St-Germain, a current Board member of the IDM Board, will join the Board of Ascot along with Robert McLeod, Ryan Weymark and Dave Green as members of the team. The transaction will be completed by way of a court approved plan of arrangement under the Business Corporations Act (British Columbia). The transaction will require the approval of (i) at least 66.7% of the votes cast by IDM security holders; (ii) at least 66.7% of the votes cast by IDM shareholders; and (iii) if applicable, a majority of the votes cast by IDM shareholders present in person or represented by proxy at the IDM special meeting, excluding certain votes. Closing of the transaction is subject to the receipt of applicable regulatory approvals and the satisfaction of certain other closing conditions. The deal is further subject to Ascot shares to be issued to IDM securityholders in connection with the arrangement having been approved for listing on the TSX-V and Ascot shall have completed the concurrent financing.

The arrangement has been unanimously approved by the Board of Directors of both Ascot and IDM. The Board of Directors of IDM received fairness opinions with respect to the fairness of the consideration to be received by the shareholders of IDM under the arrangement, respectively, from a financial point of view, and the Board of Directors of Ascot received a fairness opinion that the consideration to be paid by Ascot is fair, from a financial point of view, to Ascot. Directors and officers of IDM along with IDM's largest shareholder, Osisko, holding in the aggregate 18.2% of the outstanding IDM shares, have each entered into customary voting and support agreements to, amongst other things, vote in favour of the arrangement at the special meeting of IDM security holders to be held to consider the transaction. A special meeting of the shareholders of IDM Mining will be held on March 20, 2019 to consider the merger. As of March 20, 2019, the transaction was approved by the shareholders of IDM. The transaction is anticipated to be completed by the end of March 2019. As of March 20, 2019, the transaction is expected to be completed on or about March 27, 2019.

Haywood Securities Inc. served as financial advisor and Bob Wooder of Blake, Cassels & Graydon LLP as legal advisor to Ascot. Raymond James Ltd. acted as financial advisor and Jason Sutherland of DuMoulin Black LLP as legal advisor to IDM. Graeme Martindale, Lauren DeGoey and Kent Kufeldt of Borden Ladner Gervais LLP acted as legal advisors to IDM's special committee. Raymond James Ltd. and Cormark Securities Inc. each provided a fairness opinion to IDM's special committee and Board of Directors. Laurel Hill Advisory Group, LLC acted as information agent for IDM and will receive a fee of approximately CAD 0.035 million.