Vancouver, British Columbia–(Newsfile Corp. – January 12, 2022) – 1287401 B.C. Ltd. (“128” or the “Company“) is pleased to announce that it has entered into a business combination agreement (the “Agreement“) with McFarlane Lake Mining Incorporated (“McFarlane“), a privately held company existing under the laws of Ontario, and 1000034047 Ontario Inc. (“Subco“), a wholly-owned subsidiary of 128 existing under the laws of Ontario, pursuant to which 128, McFarlane and Subco have agreed to complete a transaction that will result in a reverse-takeover of 128 by the current shareholders of McFarlane and Subco (the “RTO” or “Transaction“). The Agreement was negotiated at arm’s length and is dated January 12, 2022. The closing of the Transaction is expected to occur on or about January 14, 2022 and will be subject to a number of terms and conditions including the receipt of all necessary regulatory and third-party consents and approvals. 128 and McFarlane are not related parties.

Mark Trevisiol, chief executive officer of McFarlane, stated, “entering into this Agreement with 128 represents a significant milestone for McFarlane in its ongoing journey to become a publicly traded mineral exploration company in Canada. 128 has been great to work with throughout the course of this journey and we look forward to working hard to complete the business combination in the near future.”

About 1287401 B.C. Ltd.

128 was incorporated under the Business Corporations Act (British Columbia) on February 3, 2021. 128 is a reporting issuer under the securities laws of the jurisdictions of Alberta and British Columbia. None of its securities, are listed or posted for trading on any stock exchange and no public market exists for any securities of 128. Additional information on 128 can be found by reviewing its profile on SEDAR at www.SEDAR.com.

About McFarlane Lake Mining Incorporated

McFarlane is a private mineral exploration company incorporated under the Business Corporations Act (Ontario) on August 21, 2020. McFarlane has entered into a definitive purchase agreement dated effective December 30, 2021 with Canadian Star Minerals Ltd. (“CSM“) to purchase all of CSM’s right, title and interest in the High Lake mineral property located immediately east of the Ontario-Manitoba border, the West Hawk Lake mineral property located immediately west of the Ontario-Manitoba border and the McMillan mineral property located 13km south of Espanola. In addition, McFarlane holds options to purchase the Michaud/Munro mineral property and the Mongowin mineral property.

About 1000034047 Ontario Inc.

Subco is a private company incorporated under the Business Corporations Act (Ontario) on November 23, 2021, for the purpose of completing the Transaction.

Terms of the Transaction

It is currently anticipated that the Transaction will be completed by way of a three-cornered amalgamation (the “Amalgamation“).

There are currently an aggregate of 3,750,000 outstanding common shares in the capital of 128 (each, a “128 Share“), 75,582,313 common shares in the capital of McFarlane (each, a “McFarlane Share“) and 65,600 common shares in the capital of Subco. Additionally: (i) McFarlane has 4,173,406 share purchase warrants outstanding (the “McFarlane Warrants“), with each McFarlane Warrant being exercisable into one McFarlane Share at an exercise price of $0.60 for a period of 36 months from the date of issuance thereof; and (ii) Subco has 32,750 share purchase warrants outstanding (the “Subco Warrants” and together with the McFarlane Warrants, the “Warrants“), with each Subco Warrant being exercisable into one Subco share (each a “Subco Share“) at an exercise price of $0.60 for a period of 36 months from the date of issuance thereof. Pursuant to the Definitive Purchase Agreement, McFarlane (or the Resulting Issuer, as defined below) will issue an aggregate of 5,625,000 McFarlane Shares or Resulting Issuer shares, as the case may be, upon transfer of legal title of the leases comprising the High Lake and West Hawk Lake mineral properties.

In connection with the proposed Transaction, among other things: (i) McFarlane and Subco will amalgamate pursuant to the provisions of the Business Corporations Act (Ontario) and continue operating under the name “McFarlane Lake Mining Incorporated” (“Amalco“); (ii) each Subco Share will be exchanged for one fully-paid and non-assessable 128 Share; (iii) each McFarlane Share will be exchanged for one fully-paid and non-assessable 128 Share; (iv) as consideration for the issuance of the 128 Shares to effect the Amalgamation, 128 will receive one common share of Amalco for each 128 Share issued to holders of McFarlane Shares and Subco Shares; (v) each Subco Share issued to 128 on incorporation will be cancelled; (vi) Amalco will be a wholly-owned subsidiary of 128; and (vi) 128 will change its name to “McFarlane Lake Mining Limited” (the “Resulting Issuer“). In connection with completion of the Transaction, 128 will issue approximately 4,206,156 warrants to existing holders of McFarlane Warrants and Subco Warrants. 128 has obtained the approval of its shareholders to continue to Ontario from British Columbia. Such continuance is subject to the receipt of all regulatory approvals, and if completed is expected to occur following completion of the Transaction.

Concurrently with the completion of the Transaction, the Resulting Issuer will: (i) grant an aggregate of 5,500,000 replacement options to the directors and officers of McFarlane, to purchase common shares (the “Option Shares“) of the Resulting Issuer, exercisable at a price of $0.10 per Option Share until May 31, 2026; and (ii) issue 834,575 replacement broker warrants and 262,500 replacement advisory warrants to Canaccord Genuity Corp. (“Canaccord“) on the same terms and conditions as the broker warrants and advisory warrants issued to Canaccord for services provided in connection with McFarlane’s previously completed brokered and non-brokered offerings of units and flow-through common shares (together, the “Offerings“) (see 128’s press release dated December 10, 2021 for further information regarding the Offerings).

The proposed Transaction is subject to requisite regulatory approvals and standard closing conditions, as well as the conditions described herein. Upon completion of the Transaction, it is the intention of the parties that the Resulting Issuer will continue to focus on the current business and affairs of McFarlane.

Board of Directors and Executive Management of the Resulting Issuer

It is expected that upon completion of the Transaction, the Resulting Issuer will have a board of seven (7) individuals, all of whom have been nominated by McFarlane. As of the date hereof, and subject to regulatory approval, McFarlane anticipates that the Resulting Issuer will have the following officers and directors:

Conditions to the Transaction

Completion of the Transaction will be subject to a number of conditions of closing that are customary for a transaction of this nature, including, without limitation:

• 128 shall obtain the requisite approvals in connection with the following matters: (i) the continuance of 128 from British Columbia to Ontario; (ii) a change of name to “McFarlane Lake Mining Limited” or such other name as may be requested by McFarlane and acceptable to applicable regulatory authorities (the “Name Change“); (iii) the split of the outstanding securities of 128 on the basis of 1.20967742 post-split 128 Shares for each one pre-split 128 Share; and (iv) the appointment of the directors of the Resulting Issuer to replace the current directors of 128 immediately following the completion of the proposed Transaction.

• The common shares of the Resulting Issuer having been conditionally approved for listing on the NEO Exchange Inc. (the “NEO“) (such conditional approval was obtained from the NEO on December 14, 2021).

Further Information

All information contained in this news release with respect to 128, McFarlane and Subco was supplied by the parties respectively for inclusion herein, and each party and its directors and officers have relied on the other party for any information concerning the other party.

For further information regarding the proposed Transaction, please contact:

1287401 B.C. Ltd.
James Ward
[email protected]

McFarlane Lake Mining Incorporated
Mark Trevisiol
[email protected]

CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION:

Certain statements and information contained herein may constitute “forward-looking statements” and “forward-looking information,” respectively, under Canadian securities legislation. Generally, forward-looking information can be identified by the use of forward-looking terminology such as, “expect”, “anticipate”, “continue”, “estimate”, “may”, “will”, “should”, “believe”, “intends”, “forecast”, “plans”, “guidance” and similar expressions are intended to identify forward-looking statements or information. The forward-looking statements are not historical facts, but reflect the current expectations of management of the Company regarding future results or events and are based on information currently available to them. Certain material factors and assumptions were applied in providing these forward-looking statements. The forward-looking statements discussed in this press release may include, but are not limited to, information concerning the completion of the Transaction and the approval of the listing of the Resulting Issuer common shares on the NEO. Forward-looking statements regarding the Company are based on the Company’s estimates and are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, levels of activity, performance, or achievements of the Company to be materially different from those expressed or implied by such forward-looking statements or forward-looking information, including capital expenditures and other costs. 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. Accordingly, readers should not place undue reliance on forward-looking statements and forward-looking information. The Company will not update any forward-looking statements or forward-looking information that are incorporated by reference herein, except as required by applicable securities laws.

This press release is not an offer of the securities for sale in the United States. The securities have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an exemption from registration. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful.

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